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☆ Japanese firms want stability rather than change from new BOJ governor: Reuters poll
▼ + stars: | 2023-04-19 | by ( Tim Kelly | ) www.reuters.com time to read: +3 min

Summary 52% of firms want the BOJ to help stabilize financial marketsFewer firms want end to BOJ zero rate policyA third of firms want the BOJ to stick with current policies16% of firms want revision to 2% inflation targetTOKYO, April 20 (Reuters) - Most Japanese firms want Bank of Japan Governor Kazuo Ueda to focus on financial market stability at his first policy meeting next week, with few seeing benefits from any easing of its ultra-loose monetary policy, a Reuters monthly poll showed. Of nearly 500 major companies polled, 52% said they hoped for financial stability measures, with a third saying Ueda should maintain the policies of his predecessor, Haruhiko Kuroda. Slightly less than a quarter of the Japanese firms surveyed by Reuters said they wanted a revision of the BOJ's negative interest rate policy, down from nearly a half two months ago when Ueda was nominated to his post. Fewer companies also urged the central bank to revise its inflation target, down to 16% from 28% of those polled in February. The Reuters Corporate Survey, conducted for Reuters by Nikkei Research between April 5 and April 14, canvassed 493 big non-financial Japanese firms, including 246 manufacturers and 247 non-manufacturers.

☆ Big Japanese manufacturers remain gloomy as external demand ebbs - survey
▼ + stars: | 2023-04-18 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

"The survey confirmed the economy is on track for a post-coronavirus recovery backed by service-sector firms, although manufacturers are affected by a slowdown in global demand," said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities. The Reuters Tankan, which closely tracks the Bank of Japan's (BOA) quarterly key tankan survey, canvassed 493 big non-financial firms. The sentiment index for big manufacturers in the Reuters Tankan survey stood at minus 3, unchanged from the previous month and posting a fourth straight month of negative readings, according to the survey. The Reuters Tankan manufacturers index is expected to rebound to plus 7 over the next three months. The large service-sector firms' index edged up to plus 24 in April from plus 21 seen in the previous month, hitting the highest level since December.

☆ New BOJ chief's message to world: We're staying the course - for now
▼ + stars: | 2023-04-17 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

Under YCC, the BOJ guides short-term rates at -0.1% and the 10-year Japan government bond yield around zero with an implicit cap of 0.5%. "We're in an economy where we're going to be hit more by supply shocks, and monetary policy will face more serious trade-offs," she said on Friday. Ranil Salgado, the IMF's Japan mission chief, sees scope for the BOJ to modify the long-term yield target this year, given heightening prospects of durable wage growth. As long as the short-term rates remain zero or slightly negative, the BOJ can keep monetary policy accommodative even if it tweaks the yield target, he said. "We are advising (the BOJ) to pretty much already be thinking about it," Salgado said on the idea of tweaking YCC.

☆ Analysis: New BOJ head's message to world: We're staying the course - for now
▼ + stars: | 2023-04-16 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

☆ IMF sees scope for BOJ to tweak yield target this year
▼ + stars: | 2023-04-15 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Salgado said the BOJ must keep monetary policy ultra-loose as sustainable achievement of 2% inflation is not yet in sight. Once the BOJ has confidence that Japan will see inflation and wage growth durably accelerate, it can tweak its long-term interest rate target, he said. Under its yield curve control (YCC) policy, the BOJ guides short-term interest rates at the -0.1% level and the 10-year bond yield around zero with an implicit cap of 0.5%. As long as the short-term rates remain zero or slightly negative, the BOJ can keep monetary policy accommodative even if it tweaks the yield target, Salgado said. "Our personal view is, yes," he said, when asked whether conditions could fall in place for the BOJ to tweak the 10-year yield target this year.

☆ BOJ executive warns of 'extremely high' uncertainty over Japan's economy
▼ + stars: | 2023-04-14 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Summary BOJ must keep easy policy to support economy - ShimizuFinancial stress warrants close monitoring - ShimizuOverseas risks key to BOJ's growth, inflation forecastsWASHINGTON, April 14 (Reuters) - Bank of Japan Assistant Governor Tokiko Shimizu said on Friday there had been "extremely high" uncertainty regarding Japan's economy, as slowing global growth and recent financial market stress cloud its outlook. "More recently, financial market stress is drawing attention," she said. "Taking these risks into account, it's necessary to pay due attention to developments in the financial sector" and the impact on Japan's economy and prices. Japan's economy has made a delayed recovery from the scars of the COVID-19 crisis, with an end to pandemic-induced curbs propping up consumption. But global recession fears cloud the outlook for the export-reliant economy, a risk that may keep the BOJ from phasing out its massive stimulus.

☆ Japan convening panel on digital yen as BOJ pilot scheme gets underway
▼ + stars: | 2023-04-14 | by ( ) www.reuters.com time to read: +1 min

Central banks around the world have scrambled to develop digital currencies to modernize financial systems and facilitate domestic and cross-border payments. But Japan remains undecided on whether to issue a central bank digital currency (CBDC), and the BOJ has said the pilot programme may last for several years. "We understand the BOJ's study is making a steady headway," a finance ministry official told reporters. "However, we have not at all decided on whether Japan will issue a CBDC." The BOJ and Financial Services Agency will attend the panel sessions as observers.

☆ New BOJ chief Ueda sticks to upbeat view on wages, global economy
▼ + stars: | 2023-04-14 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

"The BOJ's forecasts already take into account the chance of a global economic slowdown. But they don't see a severe global recession as a baseline projection," Ueda told a news conference on Thursday after attending the Group of 20 (G20) finance leaders' meeting in Washington. "As our base scenario is for global growth to pick up after a period of slowdown, Japan's wages will likely keep rising," he said. Markets are focusing on the BOJ's first policy meeting chaired by Ueda to be held on April 27-28, when the board will produce fresh quarterly growth and inflation forecasts extending through fiscal 2025. I'll think about it closely once I'm back," Ueda said, when asked about prospects for the April policy meeting.

☆ The yen could reach 120 per dollar, up 20% from October's peak
▼ + stars: | 2023-04-13 | by ( Lee Ying Shan | ) www.cnbc.com time to read: +1 min

A Japanese 10,000 yen and a U.S. 100 dollar banknote juxtaposed against each other in Tokyo, Japan, on Monday, June 20, 2016. The Japanese yen could strengthen to 120 per dollar by the end of the year on the back of a change in the central bank policy. "We have quite high conviction in our view — we're looking at 125 [per dollar] by the end of June, and we're actually looking at 120 by the end of this year," said Craig Chan, Nomura's head of global FX strategy. "We believe the Fed is at the peak. There's certainly, in our view, still tweak risk around BOJ policy," said Chan.

SINGAPORE/LONDON, April 12 (Reuters) - The dollar dipped on Wednesday with investors expecting U.S. inflation data out later in the day to hold some clues on how soon U.S. interest rates will peak. The U.S. inflation data for March is forecast to come in at 5.2% year-on-year, down from 6.0% previously, while core inflation likely ticked higher to 5.6%, according to a Reuters poll of economists. Inflation data "could be the difference between a 25bp hike or pause at the Fed's next meeting in May," said Matt Simpson, senior market analyst at City Index, adding that money markets could "quickly revert to reprice a policy pause" if the inflation data comes in softer than expected. A raft of Fed speakers on Tuesday offered little guidance on how much further U.S. interest rates would rise. New York Fed President John Williams said it depended on incoming data.

☆ Dollar slips ahead of US inflation data, still hits month high against yen
▼ + stars: | 2023-04-12 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, April 12 (Reuters) - The dollar dipped on Wednesday against most major currencies, with the exception of the yen, with investors expecting U.S. inflation data out later in the global day to hold some clue on how soon U.S. interest rates will peak. The U.S. inflation data for March is forecast to come in at 5.2% year-on-year, down from 6.0% previously, while core inflation likely ticked higher to 5.6%, according to a Reuters poll of economists. A raft of Fed speakers on Tuesday offered little guidance on how much further U.S. interest rates would rise. New York Fed President John Williams said it depended on incoming data. Against the yen , the dollar rose to a nearly one-month high of 134.045, a reflection of the stark contrast between the Fed's aggressive monetary policy tightening cycle and the Bank of Japan's (BOJ) ultra-loose policy.

☆ Asian stocks subdued ahead of US inflation data, Fed minutes
▼ + stars: | 2023-04-12 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

Data on Tuesday showed China's consumer inflation in March was at its slowest since September 2021. The consumer price index is expected to show core inflation rose 0.4% on a monthly basis and 5.6% year-over-year in March, according to a Reuters poll of economists. Markets are now pricing in a 66% chance of the Fed raising interest rates by 25 basis points in May and then pausing for the subsequent meetings, according to the CME FedWatch tool. The Fed last month raised interest rates by a quarter of a percentage point, taking it to a range of 4.75% to 5.00%. "Investors seem to be getting ahead of themselves in expecting the Fed to begin cutting interest rates", said Luca Paolini, chief strategist at Pictet Asset Management.

☆ Dollar dips ahead of key US inflation data
▼ + stars: | 2023-04-12 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, April 12 (Reuters) - The U.S. dollar slipped on Wednesday ahead of a closely-watched inflation reading later in the day that will provide clues on the path of Federal Reserve interest rate hikes. Following last week's solid U.S. jobs data, all eyes are now on the inflation report, with currency moves subdued ahead of the release. A Reuters poll of economists have forecast headline inflation in March to come in at 5.2% year-on-year, down from 6.0% previously, while core inflation likely ticked higher to 5.6%. Meanwhile, Philadelphia Fed Bank President Patrick Harker said he feels that the end of rate hikes may be near. On Tuesday, Chicago Fed President Austan Goolsbee said that the U.S. central bank should be patient about raising interest rates in the face of recent banking sector stress.

☆ IMF says more flexible BOJ yield control can prevent market whiplash
▼ + stars: | 2023-04-12 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

Under yield curve control (YCC), the BOJ guides the 10-year government bond yield around 0% as part of efforts to sustainably achieve its 2% inflation target. The central bank's decision in December to widen the tolerance band around the yield target has heightened market bets of a further near-term tweak or end to YCC. Changes to the BOJ's yield control policy may affect financial markets through exchange rates, term premiums on sovereign bonds and global risk premiums, the IMF said. While the yield control policy has helped keep borrowing costs low, it has come under increasing criticism for distorting market pricing and crushing financial institutions' profits. "Clear communication in the event of adjustments to the Bank of Japan's monetary policy is critical to avoid market volatility," it said.

☆ Dollar dips ahead of key U.S. inflation data
▼ + stars: | 2023-04-12 | by ( ) www.cnbc.com time to read: +3 min

Five, ten, twenty, fifty and one hundred dollar bills spread outThe U.S. dollar slipped on Wednesday ahead of a closely-watched inflation reading later in the day that will provide clues on the path of Federal Reserve interest rate hikes. Following last week's solid U.S. jobs data, all eyes are now on the inflation report, with currency moves subdued ahead of the release. A Reuters poll of economists have forecast headline inflation in March to come in at 5.2% year-on-year, down from 6.0% previously, while core inflation likely ticked higher to 5.6%. "Powell has said numerous times he wants to see a downtrend in underlying inflation, but the data's not providing that yet. Meanwhile, Philadelphia Fed Bank President Patrick Harker said he feels that the end of rate hikes may be near.

☆ Ex-BOJ chief Kuroda tapped for job at university in Tokyo
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +1 min

TOKYO, April 12 (Reuters) - Former Bank of Japan Governor Haruhiko Kuroda has received a job offer from a prestigious university in Tokyo, days after retiring from the helm of the central bank, a university official told Reuters on Wednesday. Kuroda will become a senior academic fellow at National Graduate Institute for Policy Studies (GRIPS), a job aimed at making use of his rich experience for teaching students, many of whom are from Asia, the official said. "We have commissioned the post of senior fellow to Kuroda as of yesterday. His job is based on basic research, but he will also give lectures from autumn, as per his intention," Takahiro Okamoto, a GRIPS official told Reuters, adding that details have not yet been decided. Kuroda served as BOJ governor from March 2013 to April 8, after having been the Asian Development Bank president and Japanese vice finance minister for international affairs.

☆ BOJ to continue monetary easing to achieve inflation target
▼ + stars: | 2023-04-12 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +2 min

TOKYO, April 12 (Reuters) - The Bank of Japan will continue monetary easing to achieve its 2% inflation target accompanied by wage hikes in a sustainable and stable manner, new deputy governor Shinichi Uchida said on Wednesday. The comment followed Ueda's view earlier that it was appropriate to maintain the central bank's ultra-loose monetary policy for now as inflation has yet to sustainably meet its 2% target. Uchida said Japanese financial institutions are equipped with sufficient capital and fund-raising bases, making any impact from Western banking problems since March "limited." "The BOJ will continue with monetary easing so as to achieve the price stability target in a sustainable and stable manner, while supporting the economy together with wage hikes." More Japanese households are expecting prices to rise a year from now, a BOJ quarterly survey showed on Wednesday, raising pressure on the central bank to adjust or ditch its yield curve control (YCC) policy.

☆ Living standards are still falling in Japan. That’s a recipe for more stagnation
▼ + stars: | 2023-04-12 | by ( Michelle Toh | ) edition.cnn.com time to read: +5 min

Adjusted for inflation, wages slipped 2.6% in February, compared to the same month a year earlier, according to government data released last week. That means it’ll be tough for Ueda to hike interest rates, especially as living standards aren’t rising either. The issue of stagnant wages could improve this year, as companies heed the call to raise salaries in response to inflation. Workers in Japan have been grappling with stagnant wages, leading to a government push for businesses to hike pay. But in Japan, it’s high enough to feel uncomfortable, given stagnant wage growth, according to Angrick.

☆ World stocks hold on to upbeat mood, dollar stalls
▼ + stars: | 2023-04-11 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

European stock markets opened broadly firmer (.STOXX), U.S. stock futures pointed to a positive open for Wall Street shares , and Japan's blue-chip Nikkei rallied over 1% (.N225). Friday's non-farm payrolls suggested labour markets remain resilient, boosting expectations for a 25 basis point (bps) U.S. rate increase in May. NEW BOJ CHIEFIn Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.57%, while MSCI's world stock index was up 0.3% (.MIWD00000PUS). U.S. Treasury yields edged down in European trade , with rate sensitive two-year yields last down 3 bps at 3.96%. Brent crude futures rose 61 cents, or 0.74%, to $84.81 a barrel, while U.S. WTI futures gained 68 cents, or 0.83%, to $80.41 a barrel.

☆ Analysis: Japan's upbeat wages may keep new BOJ chief on hook for policy tweak
▼ + stars: | 2023-04-11 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

However, a widely expected upgrade in the Bank of Japan's price forecasts due this month may show inflation staying near 2% for several years. "The BOJ will probably upgrade its price forecasts this month. In doing so, it could offer new guidance on future policy and tweak YCC around summer or autumn," she said. With more firms hiking prices and employees' pay, the BOJ may revise up the forecasts and see inflation stay around 2% through fiscal 2025, analysts say. "The BOJ may see scope to tweak YCC as early as June," he said.

☆ Why Warren Buffett is investing in Japan and how to know if you should too
▼ + stars: | 2023-04-11 | by ( Yun Li | ) www.cnbc.com time to read: +4 min

Warren Buffett has grown even fonder of his favorite Japanese trading houses, hiking his already-large investments and teasing of more to come. Berkshire Hathaway raised its stakes in five Japanese trading houses — Mitsubishi Corp. , Mitsui & Co ., Itochu Corp. , Marubeni and Sumitomo — all to 7.4%. Buffett will appear live from Japan on CNBC's "Squawk Box" on Wednesday from 6 a.m. to 9 a.m. The five trading houses — roughly akin to a conglomerate structure, just like Berkshire— seem to check every box of Buffett's stock-picking criteria. In light of expectations for tighter policy, BlackRock , the world's largest asset manager, last month cut Japanese stocks to "underweight."

There was more movement in currency markets, where the dollar rose across the board and the yen sank. Producer price inflation is expected to have fallen further in March, according to analysts' estimates of a year-on-year decline of 2.5%, which would be the fastest pace of deflation since June 2020. The annual rate of consumer price inflation is expected to remain unchanged at 1.0%, the slowest in a year, and the monthly rate is expected to rise to 0% from -0.5% in February. If these forecasts are broadly accurate, price pressures in China would appear to be extremely benign, giving the central bank room to loosen policy and stimulate the economy. In South Korea, the central bank looks to have ended its tightening cycle and will likely keep its main interest rate on hold at a 15-year high of 3.50% on Tuesday.

But Ueda said the Bank of Japan (BOJ) must also avoid being too late in normalising monetary policy, a sign he will be more open to the idea of tweaking its controversial bond yield control policy than his dovish predecessor Haruhiko Kuroda. "If the BOJ suddenly realises that inflation will stably and sustainably hit 2% and decides to normalise monetary policy, it will have to make very big policy adjustments," Ueda said in an inaugural news conference on Monday. The dollar extended its gains against the yen to hit 133.055 , the highest since April 4, on receding expectations of a near-term tweak to Japan's ultra-loose monetary policy. PRICE TRENDS HOLD KEYIf the BOJ sees that it can achieve its price target, it might need to normalise monetary policy, Ueda said. But the BOJ must sustain Kuroda's stimulus programme for the time being, including YCC, remarks that diminish the chance of a policy shift at this month's policy meeting.

[1/3] New Governor of Bank of Japan Kazuo Ueda waits for Japanese Prime Minister Fumio Kishida before their meeting at prime minister?s official residence in Tokyo, Japan, April 10, 2023. "Given high economic uncertainty, the BOJ will communicate closely with the government and guide monetary policy flexibly," Ueda told reporters after meeting with Prime Minister Fumio Kishida to receive his official appointment letter. In parliamentary confirmation hearings in February, Ueda has stressed the need to keep ultra-easy policy to ensure Japan sustainably achieves the BOJ's 2% inflation target backed by wage growth. Ueda will chair his first policy meeting on April 27-28, when the board produces fresh quarterly growth and price forecasts extending through fiscal 2025. Ueda served as BOJ board member from 1998 to 2005, during which the central bank introduced zero interest rates and then quantitative easing to combat deflation and economic stagnation.

☆ Morning Bid: Have payrolls resurrected the 'soft landing'?
▼ + stars: | 2023-04-10 | by ( ) www.reuters.com time to read: +2 min

[1/2] An employee hiring sign with a QR code is seen in a window of a business in Arlington, Virginia, U.S., April 7, 2023. Earnings for Citi, Wells Fargo and JP Morgan Chase & Co later in the week will be in focus for colour on financial conditions. Inflation figures due Wednesday can also help markets to gauge how aggressive the Federal Reserve may need to be. Friday's jobs data lifted yields, but didn't substantially shift a bigger picture view that hikes are all but finished and cuts are coming. China is running military exercises in the wake of Taiwan's president visiting the United States, while the U.S. scrambles to find the source of a damaging document leak.

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