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Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailYen weakness: Japanese consumers are 'feeling the pain,' economist saysNorihiro Yamaguchi, senior Japan economist at Oxford Economics, discusses the challenge that the Bank of Japan faces when it comes to interest rates.
Persons: Norihiro Yamaguchi Organizations: Oxford Economics, Bank of Japan Locations: Japan
Passersby walk past an electric monitor displaying the Japanese yen exchange rate against the U.S. dollar outside a brokerage in Tokyo, Japan October 4, 2023. REUTERS/Issei Kato Acquire Licensing RightsTOKYO, Oct 5 (Reuters) - The Bank of Japan's money market data indicated on Thursday that a mysterious spike in the yen rate against the dollar on Tuesday was likely not the product of official Japanese intervention. The central bank's projection for Friday's money market conditions indicated a 1.09 trillion yen ($7.32 billion) net receipt of funds, not far from the 800-900 billion net receipt of funds estimated by brokerages, excluding intervention. Bank transactions for currency intervention take effect two business days later, but the hour of the yen's rebound made it unclear whether it would show up in data for Thursday or Friday. ($1 = 149.0000 yen)Reporting by Kevin Buckland; editing by Christina FincherOur Standards: The Thomson Reuters Trust Principles.
Persons: Issei Kato, Norihiro Yamaguchi, It's, Kevin Buckland, Christina Fincher Organizations: U.S, REUTERS, Rights, Bank, brokerages, Oxford Economics, Thomson Locations: Tokyo, Japan, New York
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJapan's economy is not as strong as what headline growth implied, says economistNorihiro Yamaguchi of Oxford Economics says the country's economy will remain resilient in the coming months as there's still room for pent-up demand, but the "picture is not that bright" beyond that.
Persons: Norihiro Yamaguchi Organizations: Oxford Economics
Losses in Silicon Valley Bank's bond portfolio have highlighted similar risks for Japanese lenders' gigantic foreign bond holdings, which are carrying over 4 trillion yen ($30 billion) in unrealised losses. Three days of selling has the Tokyo Stock Exchange banks index (.IBNKS.T) down 16% - its sharpest drop since the days after the 2011 earthquake and tsunami struck Japan. Reuters GraphicsBONDS GETTING HITMost of the time, bond losses aren't a problem for banks, which typically hold their investments to maturity. An annual Bank of Japan report published on Tuesday said Japanese financial institutions have sufficient capital buffers. "And maybe some concerns Japanese banks have exposures, and some profit taking," he said.
At its two-day meeting that ended on Friday, the BOJ maintained its short-term interest rate target at -0.1% and that for the 10-year bond yield around 0%. It also left unchanged a band set around the 10-year yield target that allows the yield to rise up to 0.5%. “The decision to uphold policy rates comes at a cost. Many investors expect the central bank to phase out YCC when Kuroda’s successor, Kazuo Ueda, takes the helm in April. “The BOJ will likely abandon its 10-year bond yield target, while maintaining negative interest rates, to arrest distortions in the yield curve,” he said.
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