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Only one of 22 economists, or 5%, expected the BOJ to start unwinding its ultra-easy policy this year, the Aug 15-23 poll found, significantly down from 50% in a July survey. Four said the BOJ will start unwinding in January-March 2024, five chose April-June, six selected July-September and another six opted for October-December. A separate question showed 73% of economists expecting the BOJ to end YCC next year, up from 50% in July. A question about when the BOJ ends its negative short-term interest rate policy showed 41% of economists anticipating it in 2024, down from 54% in a May poll. Economists raised their projection for Japan's fiscal 2023 GDP growth to 1.8% from 1.1% in the previous poll.

Persons: Issei Kato, Takumi Tsunoda, YCC, Kazuo, Ueda, Hiroshi Namioka, Kantaro Komiya, Satoshi Sugiyama, Susobhan Sarkar, Shri Navaratnam Organizations: Bank of Japan, REUTERS, Rights, Shinkin Central Bank Research Institute, D, Management, U.S, Thomson Locations: Tokyo, Japan

Japan’s Q2 GDP grows fastest in more than two yearsMarcel Thieliant, head of Asia-Pacific at Capital Economics, said the export-driven momentum in growth is unlikely to be sustained. Exports expanded 3.2% in the second quarter led by car exports and inbound tourism, while capital expenditure was flat. Strong U.S. and European demand has also supported exports while the post-COVID boom in foreign tourists has given the economy a much-needed tailwind. That boost in external demand, or net exports, added 1.8 percentage points to second quarter growth. It doesn't mean a strong recovery in Japanese economy," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

Persons: Kim Kyung, Marcel Thieliant, Thieliant, Takumi Tsunoda, Shigeyuki Goto, Goto, Tetsushi Kajimoto, Pasit Kongkunakornkul, Sam Holmes Organizations: REUTERS, TOKYO, Capital Economics, Private, U.S, Shinkin Central Bank Research Institute, The Bank of Japan, Thomson Locations: Tokyo, Japan, Asia, China

☆ Japan’s economic growth beats forecasts as exports zoom
▼ + stars: | 2023-08-14 | by ( ) edition.cnn.com time to read: +3 min

While the headline GDP data provides some relief to policymakers seeking to balance economic growth with sustainable inflation, it masks underlying weakness in the household sector. Marcel Thieliant, head of Asia-Pacific at Capital Economics, said the export-driven momentum in growth is unlikely to be sustained. Exports expanded 3.2% in the second quarter led by car exports and inbound tourism, while capital expenditure was flat. Strong US and European demand has also supported exports while the post-COVID boom in foreign tourists has given the economy a much-needed tailwind. That boost in external demand, or net exports, added 1.8 percentage points to second quarter growth.

Persons: Marcel Thieliant, ” Thieliant, ”, Takumi Tsunoda, Shigeyuki Goto, ” Goto Organizations: Tokyo Reuters, Capital Economics, Private, Shinkin Central Bank Research Institute, The Bank of Japan Locations: Tokyo, Asia, China

Global financial markets have been closely watching Japan's wage data, as Bank of Japan Governor Kazuo Ueda regards pay growth as a key gauge to consider in deliberations about a shift in policy. Regular wages rose 1.8% in May from a year before, labour ministry data showed, the biggest gain since February 1995. The strong base pay growth boosted worker's total cash earnings, or nominal wages, by 2.5% in May, after a revised 0.8% increase logged in April. Still, real wages contracted 1.2% in May, the 14th consecutive month of year-on-year declines, as relentless consumer inflation outstrips nominal pay growth and squeezes households' buying power. On a seasonally adjusted month-on-month basis, household spending was down 1.1%, versus an estimated 0.5% gain to mark a fourth month of decline.

Persons: Kazuo Ueda, Kuroda, Hisashi Yamada, Rengo, Takumi Tsunoda, Shinichi Uchida, Taro Saito, Satoshi Sugiyama, Kantaro, Tetsushi Kajimoto, Sam Holmes Organizations: Global, Bank of Japan, Hosei University, Shinkin Central Bank Research, Nikkei, BOJ's, NLI Research, Thomson Locations: TOKYO

☆ Japan upgrades Q1 GDP as business spending picks up
▼ + stars: | 2023-06-08 | by ( Kantaro Komiya | ) www.reuters.com time to read: +3 min

Japan Q1 GDP growth upgradedHowever, with much of the revised January-March growth driven by inventories, rather than final demand, Tsunoda warned the recovery so far may not be as robust as headline figures suggest. The revised data showed GDP rose 0.4% in October-December, following a 1.5% contraction in July-September. Capital spending rose 1.4%, upgraded from 0.9% and roughly in line with Ministry of Finance data last week that showed manufacturers' business spending grew at the fastest rate since 2015. While consumption growth was downgraded on fresh services-sector statistics, "the broader picture is unchanged that spending on services such as restaurants and hotels contributed positively" to the January-March GDP expansion, the official added. Domestic demand as a whole contributed 1.0 percentage point to the revised first-quarter GDP growth, more than initially estimated.

Persons: restocking, Takumi Tsunoda, Tsunoda, Shinkin's Tsunoda, Kantaro, Pasit Kongkunakornkul, Sam Holmes Organizations: TOKYO, Bank of Japan, Shinkin Central Bank Research Institute, Japan, of Finance, Thomson

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.

Yet the small companies that provide most of Japan's jobs generally can't increase pay, business owners, economists and officials say. Battered by the pandemic, small firms now struggle to pass on higher costs out of fear of losing customers. They feel they have no choice but to put up with impossible demands from big companies." The trend is most apparent in industries with many small suppliers. The fair trade watchdog last month named 13 big companies it said refused to accept higher prices from suppliers.

☆ Economists say BOJ's Amamiya is top governor candidate, tightening this week unlikely
▼ + stars: | 2023-01-16 | by ( Kantaro Komiya | ) www.reuters.com time to read: +5 min

Of the 24 economists who replied to the Jan 5-12 poll, 16, or 67%, chose Amamiya as the most likely candidate to become the next BOJ governor. Four economists in the poll, or 17%, chose Nakaso, who is seen less dovish than Amamiya, as the most likely candidate. In a September poll that asked the same question, Amamiya and Nakaso received 61% and 33% of economists' votes, respectively. Five analysts expected the unwinding of easing to start in April, at the first BOJ meeting under the new governor. Elsewhere in the poll, 83% of economists said Japanese nominal wages were unlikely to outpace rising consumer prices in 2023.

☆ Bank of Japan makes surprise policy tweak
▼ + stars: | 2022-12-20 | by ( ) www.reuters.com time to read: +8 min

ATUSHI TAKEDA, CHIEF ECONOMIST, ITOCHU ECONOMIC RESEARCH, TOKYO:"Today's move reflects the BOJ's determination not to alter its yield cure control policy. CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:"I think the move was certainly unexpected, to say the least. MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE:"They've widened the band, and I guess that came earlier than expected. CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:"The timing of the policy tweak is a surprise, though we have been expecting the move to come in 2Q 2023. "The tweak may seem modest but is significant for a central bank that has held dovish for a long time.

☆ BOJ's next move will unwind loose policy, 92% of economists say
▼ + stars: | 2022-11-29 | by ( Kantaro Komiya | ) www.reuters.com time to read: +4 min

Twenty-four of 26 economists in the Nov 15-25 poll said the BOJ's next action, if any, would be "unwinding its ultra-easy monetary policy". Widely known as the policy accord, it requires the central bank to achieve its 2% inflation target "at the earliest date possible." Among those who wanted a revision, seven called for more flexibly judging achievement of the inflation target. One BOJ watcher calling for change wanted a lower inflation target, and another said the BOJ's mandate should be enlarged to include targeting employment or wage rises. On Monday, Prime Minister Fumio Kishida rejected the idea of adding wage growth as a new monetary policy goal.

☆ BOJ's next move will unwind loose policy, 92% of economists say: Reuters Poll
▼ + stars: | 2022-11-29 | by ( Kantaro Komiya | ) www.reuters.com time to read: +4 min

Twenty-four of 26 economists in the Nov 15-25 poll said the BOJ's next action, if any, would be "unwinding its ultra-easy monetary policy". Widely known as the policy accord, it requires the central bank to achieve its 2% inflation target "at the earliest date possible." Among those who wanted a revision, seven called for more flexibly judging achievement of the inflation target. One BOJ watcher calling for change wanted a lower inflation target, and another said the BOJ's mandate should be enlarged to include targeting employment or wage rises. Two economists in the poll said the accord should simply be abolished.

☆ Japan's Sept machinery orders unexpectedly fall, raising capex concerns
▼ + stars: | 2022-11-16 | by ( Kaori Kaneko | ) www.reuters.com time to read: +2 min

TOKYO (Reuters) -Japan’s machinery orders unexpectedly fell in September in a sign the global economic slowdown and higher import costs are weighing on firms’ capital spending plans. Compared with a year earlier, core orders, which exclude volatile numbers from shipping and electric utilities, grew 2.9% in September, the data found. Manufacturers surveyed by the Cabinet Office are expecting core orders to rise 3.6% in October-December, after a 1.6% drop in the previous quarter. The government downgraded its view on machinery orders for the first time since February, saying the recovery is stalling. The machinery orders data comes a day after figures showed Japan’s economy unexpectedly shrank in the third quarter.

☆ Yen softens past 150 per dollar for first time since 1990
▼ + stars: | 2022-10-20 | by ( Alun John | ) www.reuters.com time to read: +4 min

LONDON, Oct 20 (Reuters) - The dollar hit the symbolic level of 150 yen for the first time since 1990 on Thursday as the greenback was supported by Treasury yields trading at multi-year highs, keeping markets on high alert for intervention from Japanese authorities. The fragile yen briefly weakened past 150 per dollar in early European trading for the first time since August 1990. It was last trading a touch below that level, at 149.7 yen per dollar. This has sent U.S. yields and the dollar higher, particularly against the yen as the Bank of Japan is committed to keeping interest rates near zero. The benchmark U.S. 10-year Treasury yield rose to 4.18% on Thursday, its highest level since mid-2008, while the two-year Treasury yields touched a 15-year high of 4.614%.

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