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☆ Bank of Japan set to reduce JGB purchases, stands pat on interest rate
▼ + stars: | 2024-06-14 | by ( Lim Hui Jie | ) www.cnbc.com time to read: +1 min

The Bank of Japan is largely expected to hold interest rates steady at the end of its 2-day meeting ending June 14, 2024. The Bank of Japan kept its benchmark interest rate unchanged on Friday, but indicated it's considering the reduction of its purchase of Japanese government bonds. The central bank left short-term rates unchanged at between 0% to 0.1% at the end of its two-day policy meeting, as widely expected. But notably, the bank said in its statement it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled for July 30 and 31. Purchases of JGBs, commercial paper and corporate bonds will also continue as decided in the March monetary policy meeting.

Persons: Nakamura Toyoaki, Toyoaki, JGB Organizations: Bank of Japan, The Bank of Japan, U.S ., Nikkei Locations: Tokyo

☆ Euro zone inflation dents euro, dollar rises from three-month low
▼ + stars: | 2023-11-30 | by ( Samuel Indyk | ) www.reuters.com time to read: +4 min

A New Zealand dollar coin sits atop a United States one dollar bill in this photo illustration taken on March 11, 2016. Consumer price growth in the 20 nations that share the euro currency dropped to 2.4% in November from 2.9% in October, well below expectations for a fall to 2.7%. The euro dropped as much as 0.5% against the dollar to $1.0910. The Japanese currency has firmed almost 3% against the dollar in November and is on course for its strongest month this year. Sterling was last at $1.2646, down 0.39% on the day, while the Australian dollar fell 0.1% to $0.6610.

Persons: David Gray, Matthew Landon, disinflation, Landon, ECB policymaker Fabio Panetta, Mohamad Al, Jerome Powell, Christopher Waller, Christopher Wong, Toyoaki Nakamura, Sterling, It's, Samuel Indyk, Ankur Banerjee, Vidya Ranganathan, Kim Coghill, Miral Fahmy, Susan Fenton Organizations: New Zealand, REUTERS, European Central Bank, Morgan Private Bank, ECB, ECB policymaker, Danske Bank, Bank of Japan, Thomson Locations: States, Europe, U.S, London, Singapore

☆ Analysis-China's economic gloom hangs over Japan's long-awaited recovery
▼ + stars: | 2023-09-06 | by ( Tetsushi Kajimoto | Leika Kihara | ) www.reuters.com time to read: +5 min

TOKYO (Reuters) - Policymakers in Tokyo believe China’s deepening economic woes could hit Japan’s fragile recovery, especially if Beijing fails to shore up demand with meaningful stimulus, potentially delaying an exit from ultra-loose monetary policy. China is Japan’s largest trading partner, accounting for 20% of its exports, having replaced the United States in 2020. “Exports to China had already been weak and headwinds to inbound tourism are clearly bad for Japan’s economy,” said Toru Suehiro, chief economist at Daiwa Securities. Firms also promised wage hikes unseen in three decades this year, heightening the case for a retreat from decades of ultra-loose monetary policy. The darkening outlook for Japan’s recovery may push back the timing of a BOJ policy shift.

Persons: Marko Djurica, Kazuo Ueda’s, ”, Hiroyuki Ogawa, Ogawa, Takeshi Niinami, Toru Suehiro, Ueda, Toyoaki Nakamura, “, Seisaku Kameda Organizations: REUTERS, Bank of Japan’s, Reuters, Japan, Komatsu Ltd, Komatsu, Suntory Holdings, Daiwa Securities, Japan’s Sompo Holdings Locations: TOKYO, Tokyo, Beijing, Japan, United States, China

In a sign of growing pessimism over China, the government also said its monthly economic report for August that "concern over China's outlook" was among risks to Japan's recovery. "Exports to China had already been weak and headwinds to inbound tourism are clearly bad for Japan's economy," said Toru Suehiro, chief economist at Daiwa Securities. "All in all, it's hard to justify tightening monetary policy any time soon." Firms also promised wage hikes unseen in three decades this year, heightening the case for a retreat from decades of ultra-loose monetary policy. The darkening outlook for Japan's recovery may push back the timing of a BOJ policy shift.

Persons: Marko Djurica, Kazuo Ueda's, Hiroyuki Ogawa, Ogawa, Takeshi Niinami, Toru Suehiro, Ueda, Toyoaki Nakamura, Seisaku Kameda, Tetsushi Kajimoto, Sam Holmes Organizations: REUTERS, Bank of Japan's, Reuters, Japan, Komatsu Ltd, Komatsu, Suntory Holdings, Daiwa Securities, Japan's Sompo Holdings, Thomson Locations: Tokyo, Japan, China, TOKYO, Beijing, United States

A man walks at the headquarters of Bank of Japan in Tokyo, Japan, January 18, 2023. The central bank would take time to determine whether it can raise interest rates as it waits for evidence that a sustained economic recovery will eradicate Japan's deflationary mindset, he said. "The key is for the economy to keep recovering," Nakamura told a news conference, when asked about the conditions for ending negative interest rates. We therefore need more time before shifting to monetary tightening," he said, adding the key was to determine whether companies' growth expectations were heightening. Markets are divided on whether the BOJ could remove the yield cap before raising short-term rates, ditch both simultaneously, or keep the yield cap when ending negative rates as a precaution against an abrupt rise in long-term yields.

Persons: Issei Kato, Nakamura, Toyoaki Nakamura, Japan's, we're, Naoki Tamura, Kazuo Ueda, Leika Kihara, Christian Schmollinger, Navaratnam, Gerry Doyle Organizations: Bank of Japan, REUTERS, Hitachi Ltd, Thomson Locations: Tokyo, Japan, GIFU, Gifu

☆ BOJ policymaker Nakamura warns against premature monetary tightening
▼ + stars: | 2023-08-31 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

Tightening monetary policy before rising prices are accompanied by higher wages would hurt domestic demand and corporate profits, Nakamura said. We therefore need more time before shifting to monetary tightening," Nakamura said in a speech to business leaders in the city of Gifu in central Japan. "Close scrutiny of (economic) conditions and cautious decision-making are required when modifying monetary policy," he said, warning against shifting policy too hastily. Governor Kazuo Ueda has said the BOJ must maintain ultra-low rates until there is more evidence that Japan's inflation can sustainably hit 2% backed by solid consumption and wage growth. Reporting by Leika Kihara; Editing by Christian Schmollinger and Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

Persons: Issei Kato, Nakamura, Toyoaki Nakamura, Naoki Tamura, Kazuo Ueda, Leika Kihara, Christian Schmollinger Organizations: Bank of Japan, REUTERS, Nakamura Overseas, Hitachi Ltd, Thomson Locations: Tokyo, Japan, Gifu

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