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LONDON, June 13 (Reuters) - Incoming Bank of England rate-setter Megan Greene signalled on Tuesday that the central bank may have a tough job returning British inflation to its 2% target, even if it drops quickly at first from double-digit figures. British inflation fell in April from double digits to 8.7% but this was still jointly the highest reading among Group of Seven countries, along with Italy. Short-dated British government bond yields rose to their highest level since 2008 as Greene spoke. She described inflation expectations in Britain as pretty well-anchored, but said there were lessons from the 1970s on how not to conduct monetary policy. Greene will replace MPC member Silvana Tenreyro, who has voted against the BoE's rate increases in recent months.

Persons: Megan Greene, Greene, Kroll, BoE, Silvana Tenreyro, Kylie MacLellan, Suban Abdulla, Sarah Young, Catherine Evans Organizations: Incoming Bank of, Monetary, parliament's, MPC, Thomson Locations: Italy, Britain, U.S

While factory output rebounded in February, some analysts warn of mounting downside risks as slumping global demand for technology goods hits the country's exports. Inflation will probably stay elevated at least during the first half of this year," said Yoshiki Shike, chief economist at Dai-ichi Life Research Institute. Separately, factory output rose 4.5% in February from January, better than a forecast 2.7% gain and rebounding from a revised 5.3% drop in January, on easing supply bottlenecks for carmakers. "There's a bigger risk of a downgrade in manufacturers' output plans due to weaknesses in the information-technology (IT) sector. Global demand is shifting away from goods towards services, which is bad news for Japan's export-reliant economy," Shinke of Dai-ichi Life Research said.

The data underscores the challenge incoming Bank of Japan (BOJ) Governor Kazuo Ueda faces in assessing whether the recent cost-driven inflation will shift to one backed by solid demand and wage growth. The pace of increase slowed from a 3.3% gain in February and a nearly 42-year high of 4.3% hit in January, due largely to the effect of government subsidies to curb utility bills. In a glimmer of hope, factory output rose 4.5% in February from the previous month, government data showed on Friday, more than a median market forecast for a 2.7% gain. Manufacturers surveyed by the government expect to increase output by 2.3% in March and by 4.4% in April, the output data showed. Reporting by Takahiko Wada and Leika Kihara; Editing by Sam Holmes and Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

☆ Take Five: And let there be calm
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +5 min

LONDON, March 23 (Reuters) - At the incredible end to the first quarter for financial markets, rattled by bank turmoil, some stability will be much hoped for in coming days. SNB chief Thomas Jordan reckons the next two weeks will be vital to securing UBS's Credit Suisse takeover. Market cap of US regional banks included in the S&P 500 regional bank index3/ DID YOU SAY AT1? Potential legal action is also possible after Swiss authorities ruled that holders of Credit Suisse AT1 bonds would get nothing in the deal. And U.S. and European banks turmoil show how quickly a crisis can surface, giving Ueda even more reason for caution.

☆ Bad news salvo gives Bank of Japan some cover
▼ + stars: | 2023-03-16 | 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, March 16 (Reuters Breakingviews) - Incoming Bank of Japan (8301.T) Governor Kazuo Ueda can breathe a sigh of relief; things aren’t going very well. Ripples from the collapse of Silicon Valley Bank have shoved down sovereign bond yields, inadvertently driving off an attack by traders who believed global inflation made rate hikes unavoidable. This year, however, spiking energy costs have pushed the core consumer index excluding fresh food over 4%, double the BOJ’s target. Consumer price inflation including energy but excluding fresh food touched 4.2% in January, a 41-year high. Core consumer inflation has now exceeded the Bank of Japan's 2% target for nine straight months.

☆ Japan Piled Back Into U.S. Treasurys This Year. Investors Worry It Won’t Last.
▼ + stars: | 2023-03-06 | by ( Eric Wallerstein | ) www.wsj.com time to read: 1 min

Kazuo Ueda is widely expected to further relax Japan’s yield-curve control policy. Japan’s rebounding appetite for U.S. Treasurys supported shaky bond markets early this year. Now, investors worry it might be growing satiated. Japanese investors bought the most long-term foreign bonds in the week ended Feb. 17 since the onset of Covid-19, according to Japan Ministry of Finance data. Institutional investors—comprising banks, life insurers and pensions—added nearly $21 billion to their foreign bondholdings.

The dollar index , which measures the currency against a basket of peers, was flat at 104.64, but was still set for a February gain of 2.6%, its first monthly increase since September. The next move in the dollar is really a function of how the February data starts to play out in March," Atrill said. U.S. Treasury yields have also moved higher with the inflation sensitive two-year yield back at three-and- a-half-month highs. [US/}The dollar on Tuesday gained particularly against the Japanese yen , climbing 0.44% to 136.84, its highest in over two months. ,Elsewhere, sterling built on its gains from the previous session against the dollar, rising 0.2% to $1.2082.

☆ EUROPE Market mood downbeat ahead of raft of data
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Anshuman DagaThe overarching downbeat mood among investors shows no signs of improving as markets become increasingly wary of a further rise in borrowing costs. Although U.S. markets took a breather and rose on Monday, they ended well below the day's highs and Asian markets were back in the red on Tuesday after gaining in early trade. Tuesday's U.S. consumer confidence data will be especially scrutinised for households' views on economic prospects and inflation expectations. European markets will deal with CPI data due from France and Spain. While inflation has eased a bit, providing some support to markets, a barrage of economic data suggests that inflation is stickier than expected, reinforcing the "higher-for-longer" rates view.

Rather, it must come up with ideas" to mitigate the costs and help sustain stimulus, Uchida told an upper house confirmation hearing. The remarks follow those of incoming BOJ Governor Kazuo Ueda on Monday suggesting his preference to spend "plenty of time" if the central bank were to conduct a review of its policy framework. While stressing that it was premature to discuss an exit strategy from ultra-loose monetary policy, Uchida said any exit would involve adjustments in the BOJ's interest rate targets and the level of its balance sheet. "In what order and at what timing the BOJ will make these adjustments will depend on economic and financial developments at the time," Uchida said. The BOJ can tap its experience conducting ultra-loose policy and dealing with market forces, to ensure it can steer a smooth exit regardless of economic conditions at the time, he said.

☆ Sterling holds gains after rising on UK trade deal with EU
▼ + stars: | 2023-02-28 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, Feb 28 (Reuters) - The pound held steady on Tuesday, retaining gains overnight after Britain struck a new trade deal with the European Union, which brightened the outlook for the post-Brexit UK economy and signalled improved relations between London and the bloc. The dollar was mostly flat in early trade but was on track to end higher for the month, ending a four-month losing streak. The euro similarly got a lift and was last 0.05% higher at $1.0614, after rising 0.6% on Monday. The British parliament will now vote on the deal, with the opposition Labour Party saying it will vote in favour. "The real thing is, is this a springboard for a stronger, much improved removal of trade frictions more generally, between the UK and the EU?"

TOKYO, Feb 28 (Reuters) - Incoming Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said on Tuesday the central bank shouldn't modify its ultra-easy monetary policy just to address the side-effects of prolonged stimulus. It shouldn't modify easy policy just because there are side-effects. Rather, it must come up with ideas" to mitigate the costs and help sustain stimulus, Uchida told an upper house confirmation hearing. The remark follows that of incoming BOJ Governor Kazuo Ueda on Monday suggesting his preference to spend "plenty of time" if the central bank were to conduct a review of its policy framework. Markets are rife with speculation the BOJ will overhaul its bond yield control policy once Ueda succeeds incumbent Governor Haruhiko Kuroda, whose term ends in April.

Feb 28 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Asian markets also held up better on Monday than many might have expected following Wall Street's slump on Friday and the heightened U.S.-China tensions over the weekend. If it is end of month profit-taking and position-squaring that are going to drive Asian markets on Tuesday, there may be scope for a decent bounce. Investors get the latest snapshots of industrial production and retail sales from Japan, credit and lending figures from Australia, and trade data from Vietnam. Vietnam joins Thailand, Hong Kong and South Korea in reporting trade data this week, figures that will give an insight into how Asia has started the year in terms of trade with the rest of the world.

☆ Dollar edges higher, headed for 1st monthly gain since September
▼ + stars: | 2023-02-28 | by ( ) www.cnbc.com time to read: +4 min

"The market has repriced the Fed and it now sees a higher terminal rate and low scope for cuts for the rest of the year. And that's what the dollar strength reflects," said Vassili Serebriakov, FX strategist, at UBS. The dollar index, which measures the currency against a basket of peers, was 0.29% higher at 104.98, and is set for a February gain of 2.4%, its first monthly increase since September. We think some of the dollar strength is exaggerated. So we are cautiously fading dollar strength," UBS' Serebriakov said.

☆ Incoming BOJ deputy head brushes aside near-term tweak to easy policy
▼ + stars: | 2023-02-28 | by ( ) www.cnbc.com time to read: +1 min

Bank of Japan deputy governor nominee Shinichi Uchida speaks during a hearing at the lower house of parliament on Feb. 24, 2023 in Tokyo. Incoming Bank of Japan (BOJ) Deputy Governor Shinichi Uchida on Tuesday brushed aside the chance of an immediate overhaul of ultra-loose monetary policy, suggesting that any review of its policy framework could take about a year. It shouldn't modify easy policy just because there are side-effects. Rather, it must come up with ideas" to mitigate the costs and help sustain stimulus, Uchida told an upper house confirmation hearing. "Any such special type of examination is better done by taking a wide perspective looking at various factors," he added.

☆ Morning Bid: Market mood downbeat ahead of raft of data
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +2 min

Tuesday's U.S. consumer confidence data will be especially scrutinised for households' views on economic prospects and inflation expectations. Economists polled by Reuters expect a median reading of 109.5 on the index, which unexpectedly fell in January. European markets will deal with CPI data due from France and Spain. While inflation has eased a bit, providing some support to markets, a barrage of economic data suggests that inflation is stickier than expected, reinforcing the "higher-for-longer" rates view. British Prime Minister Rishi Sunak struck a deal with the European Union on post-Brexit trade rules for Northern Ireland.

Durable goodsThe report dented some of the hawkishness built into U.S. interest rates, though they are expected to remain higher for longer, analysts said. The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, jumped 8.1% last month, the biggest increase since June 2020. Traders now expect the Fed to raise interest rates to about 5.4% in July, according to pricing in futures markets . At the beginning of February, they envisaged rates rising to a peak of just 4.9%. The dollar index , which measures the currency against six major peers, fell 0.513% and is on track to snap a four-month losing streak.

U.S. interest rates though are expected to remain higher for longer. Data showing U.S. pending home sales posting their largest gain in 2-1/2 years failed to lift the dollar, however. Traders now expect the Fed to raise interest rates to around 5.4% by the September meeting, according to pricing in rate futures markets . At the beginning of February, they envisaged rates rising to a peak of just 4.9%. "Whereas headline rates are falling, the trend of rising core inflation rates has been unbroken," he said.

☆ Incoming Bank of Japan head says merits of ultra-low rates exceed costs
▼ + stars: | 2023-02-27 | by ( ) www.cnbc.com time to read: +1 min

A bundle of Japanese 10,000 yen banknotes on a tray arranged at a branch of Resona Bank Ltd. in Tokyo, Japan. Incoming Bank of Japan Governor Kazuo Ueda said on Monday the country's trend inflation must heighten significantly for the central bank to consider tightening monetary policy. The recent rise in Japan's consumer inflation is driven by cost-push factors rather than strong demand, warranting the BOJ to maintain ultra-loose policy, Ueda said. For now, the merits of the BOJ's current monetary policy outweigh the costs, Ueda said, stressing the need to maintain support for the country's economy with ultra-low interest rates. "Big improvements must be made in Japan's trend inflation for the BOJ to shift towards monetary tightening," Ueda said.

☆ Morning Bid: It's all about inflation
▼ + stars: | 2023-02-27 | by ( ) www.reuters.com time to read: +2 min

A slew of strong U.S. economic data has reinforced the view that interest rates will stay higher-for-longer. Over in Europe, preliminary February inflation data is due from Germany, France, Spain and Portugal on Monday and Tuesday, followed by the euro bloc flash number on Thursday. Though headline euro area inflation is easing, there is mounting realisation that it could proving more stubborn than earlier expected. Traders are now pricing in another 75 basis points of moves in the 20-nation euro zone before the end of the summer. This week, European investors will also digest results from the likes of Lufthansa, fund manager Abrdn, London Stock Exchange and Telefonica.

The recent rise in Japan's consumer inflation is driven by cost-push factors rather than strong demand, warranting the BOJ to maintain ultra-loose policy, Ueda said. "There's still some distance for Japan to see inflation sustainably and stably meet the BOJ's 2% target," he told an upper house confirmation hearing. "Big improvements must be made in Japan's trend inflation for the BOJ to shift towards monetary tightening," Ueda said. "In guiding monetary policy, central banks must weigh the benefits and costs of each step," Ueda said. "There are various side-effects emerging, but the BOJ's current policy is necessary and appropriate" to achieve its 2% inflation target, he said.

☆ Morning Bid: Long March ahead
▼ + stars: | 2023-02-27 | by ( ) www.reuters.com time to read: +5 min

"If it goes down that road it will come at real costs to China," White House national security adviser Jake Sullivan told CNN. China said on Monday it sought dialogue and peace for Ukraine despite the U.S. warnings. European stocks and U.S. futures recaptured some ground on Monday but the DXY dollar index briefly hit its highest since Jan. 6. The new U.S. interest rate horizon remains jarring, however. Meanwhile, Warren Buffett's Berkshire Hathaway (BRKa.N) on Saturday reported its highest-ever annual operating profit, even as foreign currency losses and rising interest rates contributed to lower earnings in the fourth quarter.

☆ Fed economists say the central bank will have to cause serious pain to Americans and the economy if it sticks to its current path
▼ + stars: | 2023-02-24 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

In the Fed minutes released this week, the central bank's own economists have started to sound the alarm on a recession. Jerome Powell, for his part, has insisted that the Fed's 2% inflation target is set in stone. The jobless rate today stands at 3.4%. We will have other things to worry about at that point besides whether the Fed's inflation target should be 2.0 or 2.75 percent." How realistic do you think the Fed's 2% inflation target is?

☆ Incoming Bank of Japan chief Ueda says current low rates appropriate
▼ + stars: | 2023-02-24 | by ( ) www.cnbc.com time to read: +1 min

Kazuo Ueda, nominee for governor of the Bank of Japan (BOJ), speaks during a confirmation hearing at the lower house of parliament in Tokyo, Japan, on Friday, Feb. 24, 2023. Incoming Bank of Japan (BOJ) Governor Kazuo Ueda said on Friday it was appropriate to maintain ultra-loose monetary policy as inflation has yet to sustainably and steadily meet the central bank's 2% target. Ueda said the recent rise in consumer inflation was driven mostly by surging import costs of raw material, rather than strong domestic demand. Otherwise, the BOJ will be cooling demand, worsening the economy and pushing down prices by tightening monetary policy," Ueda told the lower house confirmation hearing. But the BOJ's current policy is a necessary, appropriate means to achieve 2% inflation."

☆ Instant view: Incoming BOJ chief Ueda says current low rates appropriate
▼ + stars: | 2023-02-24 | by ( ) www.reuters.com time to read: +6 min

Feb 24 (Reuters) - Incoming Bank of Japan (BOJ) Governor Kazuo Ueda said on Friday it was appropriate to maintain ultra-loose monetary policy as inflation has yet to sustainably and steadily meet the central bank's 2% target. "I think he's intentionally doing that, so that the market will calm down a little bit about policy change expectations." "I don't think Ueda has the same stance as (Haruhiko) Kuroda but it is not clear whether Ueda would tweak the BOJ policy as the market expected." CHARU CHANANA, MARKET STRATEGIST, SAXO MARKETS, SINGAPORE"No surprises there, we expected Ueda to take it slow and he's starting off echoing Kuroda's views. He has been out of touch with the BOJ policy making since 2005 and will take time even if he was to consider policy normalisation at some stage."

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