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☆ Dollar eases as inflation in focus, BOJ governor nomination awaited
▼ + stars: | 2023-02-14 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

The dollar index , which measures the U.S. currency against six major rivals, eased 0.019% to 103.17, having slipped 0.34% overnight. NEW BOJ GOVInvestors are also awaiting the formal nomination for the next Bank of Japan governor. Sources told Reuters that Japan's government was likely to appoint academic Kazuo Ueda as the next BOJ governor. Ueda, a former BOJ policy board member and an academic at Kyoritsu Women's University, is considered an expert on monetary policy but had not even been seen as a dark horse candidate for the top job. The Japanese yen strengthened 0.23% to 132.12 per dollar, having slipped 0.7% in the previous session.

☆ Kazuo Ueda is set to become Japan's next central bank governor. Here's what it means
▼ + stars: | 2023-02-14 | by ( Jihye Lee | ) www.cnbc.com time to read: +2 min

Bloomberg | Bloomberg | Getty ImagesKazuo Ueda is set to become the next governor of the Bank of Japan, succeeding current central bank chief Governor Haruhiko Kuroda. Kishida recently emphasized the need for the next central bank governor to have "global communication skills" and be able to coordinate closely with global peers, Reuters reported, citing his comments in parliament. He has led the central bank's ultra-dovish monetary policy, including maintaining a negative interest rate since 2016 – even as global peers have been hiking to tackle inflation. Bank of America Global Research expects gradual policy normalization under the central bank's new leadership instead of an abrupt change, according to the firm's economists led by Izumi Devalier. 'Well-suited' deputiesJapan's government also reportedly announced its nominees for other central bank roles including Shinichi Uchida, currently the central bank's executive director, and Ryozo Himino, the former chief of Japan's Financial Services Agency.

☆ Kazuo Ueda nominated to lead Japan's central bank in possible move away from ultra-easy policy
▼ + stars: | 2023-02-14 | by ( Laura He | ) edition.cnn.com time to read: +5 min

Hong Kong CNN —The Japanese government has nominated Kazuo Ueda to lead its central bank, in a surprise move that could pave the way for the country to wind down its ultra-loose monetary policy. Accommodative is a term used to describe monetary policy that adjusts to adverse market conditions and usually involves keeping interest rates low to spur growth and employment. As part of that program, the central bank targeted some short-term interest rates at an ultra-dovish minus 0.1% and aimed for 10-year government bond yields around 0%. But as prices rose and interest rates elsewhere went up, pressure has grown on the BOJ to wind down YCC. But Kuroda later dismissed a near-term exit from his ultra-loose monetary policy.

If this continues, liquidity from Japan will continue to support global markets," he adds. The BOJ flow in January outstripped the combined liquidity drain from the Fed, European Central Bank and Bank of England, resulting in a G4 net liquidity provision of $115.3 billion. Operations from the ECB and, most notably, the PBOC, have helped pour around $1 trillion of liquidity into the global financial system in recent months. As Citi's King says, when changes in even the least significant line items on central bank balance sheets are measured in the hundreds of billions of dollars, "they should command investors' respect." Related columns:- U.S. debt ceiling saga softens Fed's QT- Bank of Japan shock raises 2023 global liquidity risksBy Jamie McGeever; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

☆ Asian Shares track Wall Street's inflation optimism, yen recoups losses
▼ + stars: | 2023-02-14 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

Overnight on Wall Street, the S&P 500 (.SPX) rose 1.2%, while the Nasdaq (.IXIC) rallied 1.5% and Dow Jones (.DJI) was up 1.1%. Treasuries rallied a little, with the yield on the benchmark 10-year government bonds easing 2 basis points to 3.6940%. The two-year bond yields also eased from their three-month highs to hover at 4.5090%, compared with the previous close of 4.5340%. It weakened 0.2% against the Japanese yen to 132.13 yen, after gaining 0.8% the previous day. On Tuesday, the Japanese government is expected to name academic Kazuo Ueda as its pick to become next central bank governor.

☆ Bank of Japan’s new governor starts on back foot
▼ + stars: | 2023-02-14 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +3 min

HONG KONG, Feb 14 (Reuters Breakingviews) - Academic Kazuo Ueda faces a rocky time as the new governor of the Bank of Japan (8301.T). He is stepping down just as his signature yield curve control (YCC) policy is becoming increasingly unsustainable as domestic inflation rises. The Nikkei news service reported that officials had approached Deputy Governor Masayoshi Amamiya and were rebuffed. It seems likely Ueda will have to modify or abandon YCC given how much damage it is doing to the bond market and the BOJ’s balance sheet. Follow @petesweeneypro on TwitterloadingCONTEXT NEWSJapan's government on Feb. 14 named academic Kazuo Ueda as its pick to become the next governor of the country’s central bank.

☆ Morning Bid: Is it a bird?
▼ + stars: | 2023-02-13 | by ( ) www.reuters.com time to read: +2 min

Officials declined to say whether it resembled the large white Chinese balloon that was shot down earlier this month, though U.S. Air Force General Glen VanHerck is not ruling out aliens. Markets have kept an eye on the geopolitical mystery, but more focus is on whether U.S. inflation is earthbound or stubbornly hovering. Economists expect Tuesday data to show monthly rates ticked up in January, but the annual measures declined. Revised figures on Friday showed that inflation in December was a little stronger than originally reported, and a closely-watched consumer inflation expectations survey showed a notable spike in the short-term outlook. The BOJ’s YCC faces a reckoningKey developments that could influence markets on Monday:- Fed's Bowman speaks- ECB's Lagarde participates in Eurogroup meetingReporting by Tom Westbrook; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

[1/4] A Japanese flag flutters atop the Bank of Japan building under construction in Tokyo, Japan, September 21, 2017. "This is a problem that is not going to change easily," said Momoko Nojo, a prominent campaigner for gender equality in Japan. The BOJ ranked 142nd of 185 central banks on gender equality, according to a report last year by the Official Monetary and Financial Institutions Forum. About 11% of central banks surveyed had a female governor, a record high, while 37% had female deputy governors. That target is far below the European Central Bank, where women hold 30% of management roles.

"His style is to discuss monetary policy based on facts and evidence," Inoue told Reuters in an interview on Monday. "Unlike Kuroda, Ueda won't immediately turn things around after assuming the post. "He'll likely let economic data guide policy decisions." If he were to become governor, Ueda could introduce a new monetary policy framework that could include a revamped type of forward guidance, Inoue said. "If he were to become governor, Ueda will likely put emphasis on maintaining financial system stability," he added.

☆ Asia markets to fall as investors await economic data releases in week ahead
▼ + stars: | 2023-02-13 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

SYDNEY, AUSTRALIA - A person jogging passes the Sydney Opera House as the rising sun reflects off buildings in the central business district (CBD) on September 28, 2021 in Sydney, Australia. Stocks in the Asia-Pacific were set to fall on Monday as investors look ahead to a week of crucial economic data releases, including the U.S. consumer price index that will determine the Federal Reserve's path forward. The S&P/NZX 50 fell 0.21% as New Zealand braced for further impact from tropical cyclone Gabrielle. The Japanese yen stood at 131.61 against the U.S. dollar, continuing to remain volatile after a Nikkei report that Japan's government will nominate Kazuo Ueda as the Bank of Japan's next governor to succeed Haruhiko Kuroda. The yield on the 10-year Japanese government bond stood at 0.498%, hovering around the BOJ's upper ceiling of its tolerance range.

☆ Dollar hangs near 5-week high as inflation data looms; yen slips
▼ + stars: | 2023-02-13 | by ( Kevin Buckland | ) www.reuters.com time to read: +2 min

The yen slipped with the government set to nominate a candidate who backs the current policy settings as the new Bank of Japan governor on Tuesday. The risk-sensitive Australian and New Zealand dollars eased with Asian equities on worries that higher U.S. rates will choke growth. Ahead of Tuesday's CPI report, revisions to the previous data set showed consumer prices rose in December instead of falling as previously estimated. Separately, the University of Michigan surveys showed a one-year inflation outlook of 4.2%, higher than the final number in January. The U.S. currency gained 0.18% to 131.63 yen , although well within the range of the past week of 129.80 to 132.90.

Japanese GDP and Indian wholesale inflation provide investors in Asia with a couple of appetizers on Tuesday, before markets feast on the main course later in the day - U.S. inflation. Japan's Q4 growth figures come at a crucial juncture, just weeks before Bank of Japan Governor Haruhiko Kuroda steps down. Bracing for a major policy shift, BlackRock, the world's largest asset manager, on Monday downgraded their Japanese equity exposure to underweight. Having risen for five weeks in a row, its best run since 2020, Japan's Nikkei may be poised for a correction. Indian wholesale inflation, meanwhile, is expected to have eased in January to an annual 4.54% from 4.95% in December.

With inflation accelerating, Ueda could finally set Japan on a path to raise rates after the BOJ spent a decade fighting deflation risks with its unorthodox bond buying scheme costing trillions of yen. Ueda himself on Friday said current policy settings were appropriate, which also put a bit of a dampener on expectations of any shift. Implied volatility has also eased in the forex options market, suggesting an ebbing in bets on big shifts in the yen exchange rate. "It's not very apparent that (Ueda) would take on the job and then immediately change the policy." To be sure, 10-year Japanese yields were untraded at the BOJ's ceiling on Monday, indicating plenty of investors are staying short.

Ueda, a 71-year-old former Bank of Japan (BOJ) policy board member, will succeed incumbent Haruhiko Kuroda, whose second, five-year term ends on April 8, according to documents presented to parliament on Tuesday. Analysts expect Ueda, who had warned of the dangers of premature interest rate hikes in the past, to hold off on tightening monetary policy. "Ueda is likely to focus on theory and empirical analysis in guiding monetary policy," said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities. Upon parliament's approval, Ueda will chair his first BOJ policy meeting on April 27-28. A soft-spoken academic with a PhD from the Massachusetts Institute of Technology, Ueda is seen as a pragmatist who can adjust his views on monetary policy flexibly.

[1/2] Kazuo Ueda, a former member of the BOJ's policy board, is seen at the headquarters of Bank of Japan in Tokyo, Japan May 25, 2022, in this photo taken by Kyodo. Ueda, a 71-year-old former Bank of Japan policy board member and an academic at Kyoritsu Women's University, will succeed incumbent Haruhiko Kuroda, whose second, five-year term ends on April 8. The governor and deputy governor nominees will testify at confirmation hearings to be held on Feb. 24 for the lower house, and Feb. 27 for the upper chamber. International markets have been closely watching Kishida's choice of next BOJ governor for clues on how soon the bank could phase out its yield curve control (YCC) policy. With markets creaking under the BOJ's heavy-handed intervention, many investors are betting the central bank will start hiking rates under Kuroda's successor.

☆ Japan’s next central bank chief may rue promotion
▼ + stars: | 2023-02-13 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +7 min

In fact, it has spent an average of 1.3 trillion yen per trading day since the band widened: nearly 50 trillion yen in total, per Refinitiv data, and still counting. The central bank already owns over half of Japan’s sovereign bonds and is sure to suffer large losses when their prices fall, which they eventually must. The central bank chief must also work to put the country’s vast stack of inert money back to work. Kuroda effectively put the central bank at the service of former Prime Minister Shinzo Abe’s “Abenomics” stimulus programme. Fumio Kishida, the current leader, is having popularity problems and will want the central bank to support his aggressive agenda, which includes hiking defence spending, promoting innovative startups and redistributing wealth.

☆ Asia stocks ease, bonds brace for U.S. data test
▼ + stars: | 2023-02-13 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

read moreOfficials declined to say whether it resembled the large white Chinese balloon that was shot down earlier this month. The near-term direction for assets could well be determined by U.S. data on consumer prices and retail sales this week, with much resting on whether inflation continued to slow in January. Median forecasts are for headline and core consumer prices to rise 0.4% for the month, with sales rebounding by 1.6%. There is also a full slate of Fed officials speaking this week to provide a timely reaction to the data. read moreThe dollar was last holding at 131.50 yen , after bouncing from a low of 129.80 on Friday.

World markets this week will be dominated by U.S. inflation figures on Tuesday, leaving Monday free for investors in Asia to digest the previous session's action on Wall Street and adjust positioning ahead of the numbers. Indian consumer price inflation for January tops Monday's Asian economic calendar. Revised figures on Friday showed that inflation in December was a little stronger than originally reported, and a closely-watched consumer inflation expectations survey showed a notable spike in the short-term outlook. Tough talking on inflation from Fed officials was matched last week by their peers in Australia, India and Sweden, so the push is global. Sources have told Reuters that 71-year old academic Kazuo Ueda, a former Bank of Japan policy board member has been lined up to replace Haruhiko Kuroda as BOJ governor.

☆ Japan Expected to Name Kazuo Ueda, Backer of Zero Rates, as Central Bank Head
▼ + stars: | 2023-02-10 | by ( Peter Landers | Megumi Fujikawa | ) www.wsj.com time to read: 1 min

TOKYO—The expected nominee to lead the Bank of Japan , a longtime advocate of aggressive monetary policy, said Friday he wanted to continue the low-interest rate stance of the current governor. The government has decided to nominate Kazuo Ueda , a former University of Tokyo professor who served on the BOJ’s policy board from 1998 to 2005, as the next governor, said a person briefed on the appointment and public broadcaster NHK.

☆ Japan Set to Tap Kazuo Ueda, Backer of Zero Rates, as Central Bank Head
▼ + stars: | 2023-02-10 | by ( Peter Landers | Megumi Fujikawa | ) www.wsj.com time to read: 1 min

TOKYO—Japan is expected to name Kazuo Ueda , an advocate of aggressive monetary easing, to lead the Bank of Japan , and he said he wanted to continue the current governor’s low-interest-rate stance. The government decided to nominate Mr. Ueda, a former University of Tokyo professor who served on the BOJ’s policy board from 1998 to 2005, as the next governor, said a person briefed on the appointment and public broadcaster NHK.

☆ Japan's wholesale inflation stays elevated, keeps BOJ under pressure
▼ + stars: | 2023-02-10 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Japan's core consumer prices rose 0.3 percent in April from a year earlier, government data showed on May 29, keeping inflation distant from the central bank's 2 percent target. The increase in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, largely met a median market forecast for a 9.6% gain. The index, at 119.8, matched a record high hit in December, Bank of Japan (BOJ) data showed. "Firms have yet to fully pass on past rises in input costs, which is keeping inflationary pressure high," said Takeshi Minami, chief economist at Norinchukin Research Institute. "We expect the pace of inflation to gradually slow in the latter half of fiscal 2023," he told parliament.

☆ Take Five: The truth about inflation
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

That puts Tuesday's U.S. inflation data on the must-watch list. 1/ INFLATION BETSurprisingly strong January U.S. jobs data forced markets to rethink the view that interest rates will peak soon. Now, Tuesday's latest inflation figure is the next big test for where the Federal Reserve takes rates in coming months. Stock markets are confident that the Fed can bring down inflation without triggering a sharp growth slowdown. January's inflation report on Wednesday could show double-digit price rises, meaning no respite yet on the interest-rate front.

☆ Morning Bid: Volatility stirs
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

World markets end a rough week of confusing and competing narratives in distinctly edgy form, with peculiarly subdued volatility gauges flickering back to life. Both 10 and 30-year yields hit their highest levels in over a month early on Friday. Job shedding in the digital sector continued, with Yahoo's plans to lay off more than 20% of its total workforce. That said, the year-on-year oil price trend continues to be negative, as it's been all year and base effects from last year's price spike around the Ukraine invasion will only deepen that and weigh on headline inflation further. Goldman Sachs lowered its oil price forecasts for this year and next, cutting its Brent 2023 price forecast by $6 to $92 per barrel - still above current levels around $86.

The BOJ’s YCC faces a reckoningThe surprise news left investors and analysts trying to parse Ueda's recent commentary. "There is probably a lack of clarity on Ueda's policy leanings at the moment, but at least it is clear that Amamiya (who is seen as a dove) is out. That removes one of the headwinds for the yen," said Christopher Wong, currency strategist at OCBC in Singapore. "The knee-jerk reaction in yen appreciation is more of a reaction to Amamiya being out of the race." I think the new team means that they will redesign the BOJ's monetary policy, not maintain the current policy," said Takayuki Miyajima, a senior economist at Sony Financial Group in Tokyo.

☆ Japanese yen jumps on report Kazuo Ueda will be next governor of the central bank
▼ + stars: | 2023-02-10 | by ( Jenni Reid | ) www.cnbc.com time to read: +1 min

The Bank of Japan left its monetary policy unchanged on Wednesday. The Japanese yen pushed higher against both the euro and U.S. dollar on Friday after a Nikkei report said Kazuo Ueda would be appointed as the Bank of Japan's next governor. Economist Ueda is a former member of the central bank's policy board. Kuroda has overseen the BOJ's policy of ultra-low interest rates while other major central banks have been hiking to tackle inflation. However, Muto added, he may not be a "super hawkish type" – so any "normalization" would take place very slowly.

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