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With inflation expectations already "sufficiently" high, core consumer inflation could exceed the BOJ's 2% target next fiscal year, and open scope for the central bank to abandon its 0% target for the 10-year bond yield, Hoshi said. The BOJ must start worrying about the possibility of inflation accelerating more than expected." A member of various government committees and an expert on macroeconomic policy, Hoshi spoke as a panelist at the BOJ's workshop on Nov. 25 that discussed Japan's wage dynamics. Under yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and pledges to guide the 10-year bond yield around 0%. If the BOJ were to normalise monetary policy, it will do so in several stages starting with the removal of the 10-year yield target that is distorting the shape of the yield curve, he said.

☆ BOJ's Wakatabe warns risk of 'Japanification' not gone yet
▼ + stars: | 2022-12-04 | by ( ) www.reuters.com time to read: +2 min

TOKYO, Dec 4 (Reuters) - Even as cost-push factors boost inflation, global central banks must be vigilant to the risk of "Japanification", in which their economies face prolonged low inflation and stagnation, said Bank of Japan (BOJ) Deputy Governor Masazumi Wakatabe. Various structural factors could weigh on the neutral rate, or the rate at which monetary policy is neither stimulating nor restricting growth, across the globe, he said. "What Japan's long experience with deflation shows is that it's quite hard to eradicate fears of deflation," said Wakatabe, who is known as a vocal advocate of aggressive monetary easing. It continues to maintain ultra-low rates, even as rising raw material costs push inflation above the target. Wakatabe, whose five-year term as deputy governor ends in March, has consistently stressed the need to keep monetary policy ultra-loose to put a sustained end to deflation.

But she warned the outlook was "exceptionally" uncertain and dominated by risks, such as the fallout from Russia's war in Ukraine, global financial tightening and a slowdown in China's growth. But we need to rebuild and preserve buffers and be prepared to fully use our policy tool-kit," she told the same forum. The fallout from China's slowdown has been particularly painful in Asia, where factory activity slumped across the region in November. At the forum, Bank of Japan Governor Haruhiko Kuroda said he did not see a significant risk of Asia facing a sudden loss of confidence or a renewed financial crisis. "ASEAN policymakers must be vigilant" to risks and offer "clear, sufficient and timely communication to avoid unintended outcomes," he said.

☆ BOJ flags broadening price increases in once deflation-prone Japan
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +2 min

TOKYO, Nov 30 (Reuters) - A wider range of Japanese companies are raising prices, including those in sectors historically reluctant to pass on higher costs to customers, a Bank of Japan research note said on Wednesday in a nod to broadening inflationary pressure. A thorough analysis of the BOJ's "tankan" quarterly business survey showed price increases were spreading to many industries, including electronic goods retailers and drug stores, which are known for luring customers with big discounts, the note said. Some companies that raised prices did so for the first time in 30 years after a sharp rise in raw material costs, the research note said. "Hearings conducted on companies showed that when a firm with a big market share in the industry raises prices, others tended to follow suit," the research note said. Japan has been mired in decades of deflation and low inflation as many companies avoided raising prices for fear of scaring away cost-sensitive consumers.

☆ 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.

☆ BOJ to conduct digital yen trial with Japan's 3 megabanks, others - Nikkei
▼ + stars: | 2022-11-23 | by ( Daniel Leussink | ) www.reuters.com time to read: +1 min

REUTERS/Florence Lo/IllustrationTOKYO, Nov 23 (Reuters) - The Bank of Japan will start a trial with an eye on launching a digital yen with Japan's three megabanks and regional banks next spring, the Nikkei newspaper reported. The central bank could decide in 2026 whether to issue a digital currency after verifying issues for two years, such as whether there are problems with deposits and withdrawals from bank accounts, Nikkei said. A spokesperson for the BOJ was not immediately available to comment on Wednesday, a public holiday in Japan. It will likely come after the BOJ wraps up a second phase of its central bank digital currency (CBDC) experiment that started in April, and which will last about a year. The BOJ will collaborate with participating banks in the trial from next spring to check whether CBDCs can be transferred between accounts, the Nikkei reported.

TOKYO, Nov 22 (Reuters) - Japan's weighted median inflation rate, which is closely watched as an indicator on whether price rises are broadening, hit a record 1.1% in October in a sign of heightening inflationary pressure from rising raw material and labour costs. The 1.1% year-on-year rise in the weighted median inflation was the fastest pace on record and followed a 0.5% increase in September, BOJ data showed on Tuesday. Japan's weighted median inflation rate hovered around zero for the past two decades, as firms held off on price hikes for fear of scaring away cost-sensitive consumers. Unlike the consumer price index (CPI) which is swayed by fuel and energy costs, the weighted median inflation rate is useful to trace how broadly prices are rising. In a research note published in 2015, the BOJ said the weighted median inflation rate would rise more only if inflation expectations heighten, and people begin to assume that prices will continue to rise sustainably.

☆ Japan's inflation hits 40-year high as weak yen fans import costs
▼ + stars: | 2022-11-17 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +2 min

It also confirmed CPI growth remained above the Bank of Japan's (BOJ) 2% inflation goal for a seventh straight month. A slight rebound by the weak yen and planned government support for consumers to pay for higher energy bills would also rein in prices. "I expect inflation to peak by year-end and the rise in prices to start diminishing in the new year," Minami said. Kuroda has argued that global commodity costs account for half of the magnitude of price rises and that cost-push inflation will not last long. In a sign subcontractors are struggling with wholesale price pressures, the corporate goods price index jumped 9.1% in the year to October.

☆ BOJ inflation target to be scrutinised at government forum
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +1 min

Nov 14 (Reuters) - A government-affiliated think tank will host a forum next month to discuss the Bank of Japan's 2% inflation target and the "challenges ahead", the organisation said on Monday. Participants include Columbia University professor Takatoshi Ito, who was a proponent of setting an inflation target when the BOJ had none until 2013, and University of Tokyo academic Tsutomu Watanabe, a former BOJ official known for his analyses on Japan's price trends. Three months later, Abe's hand-picked BOJ governor Haruhiko Kuroda deployed a massive asset-buying programme to meet his pledge of achieving 2% inflation in roughly two years. But stubbornly low inflation and a fragile economy forced the BOJ to maintain a massive stimulus until now, keeping Japan's central bank an outlier among global peers that have been tightening monetary policy to combat soaring inflation. With prolonged easing crushing bank profits and distorting the yield curve, some lawmakers have called for tweaking the joint statement and making the 2% inflation target a long-term goal with some room for flexibility.

☆ BOJ's Kuroda vows to continue monetary easing for now, focuses on wages
▼ + stars: | 2022-11-14 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Kuroda said the job market is expected to tighten, particularly at service sector firms, many of which employ low-paid part timers and contract workers. The annual labour-management wage negotiations next spring will likely take into account both the tightening of the job market and rising inflation, he added. "We are at a stage where we will continue monetary easing to firmly back economic activity at present," Kuroda told a meeting with business leaders in Nagoya in central Japan. "The wages hold the key to see whether sustainable inflation take hold. In that sense, tightening of the labour market may be an encouraging signal to Governor Kuroda," Takeda said.

☆ Japanese Inflation Shows Signs of Easing, Kuroda Says
▼ + stars: | 2022-11-14 | by ( Megumi Fujikawa | ) www.wsj.com time to read: 1 min

Bank of Japan Gov. Haruhiko Kuroda said the BOJ was aiming to achieve its 2% inflation target. NAGOYA, Japan—There are some signs of local inflation easing, Bank of Japan Gov. Haruhiko Kuroda said, a development that helps reduce pressure on the bank to tighten its ultraloose monetary policy. But resource prices have already started falling,” Mr. Kuroda said at a news conference.

☆ BOJ Governor Kuroda vows to continue monetary easing for now
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: 1 min

TOKYO, Nov 14 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank would stick to monetary easing to support the economy for the time being so as to achieve sustainable and stable inflation accompanied by wage growth. "We are at a stage where we will continue monetary easing to firmly back economic activity at present," Kuroda told a meeting with business leaders in Nagoya in central Japan. (This story has been corrected to say Osaka instead of Nagoya in paragraph two)Reporting by Tetsushi KajimotoOur Standards: The Thomson Reuters Trust Principles.

☆ BOJ's Kuroda lays out key debating points on future exit from easy policy
▼ + stars: | 2022-11-10 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Kuroda brushed aside the chance of a near-term interest rate hike, stressing that the BOJ must continue to underpin a fragile economic recovery with loose monetary policy. But he said the BOJ can debate an exit strategy from its massive stimulus and head toward policy normalisation when achievement of its 2% inflation target, accompanied by wage increases, comes into sight. But one major factor of debate will be the pace of increase in the BOJ's short-term policy rate, now set at -0.1%," Kuroda told parliament. Kuroda said wages are likely to increase ahead as companies respond to intensifying labour shortages and recent rises in living costs, though the outlook remained highly uncertain. "It's extremely important for the BOJ to underpin the economy with ultra-loose monetary policy and ensure the necessary environment is falling into place for companies to hike wages," Kuroda said.

☆ BOJ's Kuroda lays out framework for future exit from easy policy
▼ + stars: | 2022-11-10 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

Kuroda brushed aside the chance of a near-term interest rate hike, stressing that the BOJ must continue to underpin a fragile economic recovery with loose monetary policy. But one major factor of debate will be the pace of increase in the BOJ's short-term policy rate, now set at -0.1%," Kuroda told parliament. "We discussed the need for the government and the BOJ to work closely together, and guide policy flexibly to structurally raise wages," said Kuroda. "It's extremely important for the BOJ to underpin the economy with ultra-loose monetary policy and ensure the necessary environment falls into place for companies to hike wages," Kuroda said. Kuroda said recent "rapid and one-sided" yen declines were undesirable as they make it difficult for firms to set business plans.

☆ Morning Bid: Consumer inflation, crypto deflation
▼ + stars: | 2022-11-10 | by ( ) www.reuters.com time to read: +5 min

Annual consumer price rises are expected to have eased back a touch last month to 8.0%, the lowest since February, with core inflation rates ticking lower to 6.5%. Falling used car prices, one aggravator of inflation indices over the past year, will be watched closely - as will the relative calm in oil prices. Minneapolis Fed President Neel Kashkari said it's "entirely premature" to discuss any pivot away from the Fed's current policy course. Broader markets were steady to negative around the world, mostly in a holding pattern ahead of the inflation report. The United States and China also laid out markers this week ahead of an expected meeting between their presidents at the summit.

☆ Kuroda says he has no desire to be re-appointed BOJ governor
▼ + stars: | 2022-11-10 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

TOKYO, Nov 10 (Reuters) - Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Thursday he had no desire to get re-appointed for another five-year term to head the central bank, after his current one ends in April next year. Personally, I have absolutely no desire to get re-appointed," Kuroda told parliament. The government nominates a candidate for BOJ governor, which needs parliament approval to take effect. The choice of next BOJ governor will be crucial to how quickly the central bank could phase out the current radical stimulus programme deployed by Kuroda. While there is no law prohibiting Kuroda from seeking a third five-year term, few had expected him to be reappointed when his current term ends.

☆ BOJ debated impact of future exit from easy policy amid rising prices
▼ + stars: | 2022-11-08 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

While there is no need to immediately tweak monetary policy, the BOJ must pay attention to the side-effects of prolonged easing, according to another opinion quoted in the summary. The remarks highlight the emerging divergence between Kuroda's calls to keep monetary policy ultra-loose, and the opinions of some other board members, who are more open to the idea of debating a future exit from ultra-low interest rates. Some market players bet the BOJ will tweak its yield curve control policy when Kuroda's term ends in April next year. At the Oct. 27-28 meeting, the BOJ kept ultra-low rates and maintained its dovish guidance, cementing its status as an outlier among global central banks tightening monetary policy. Reporting by Leika Kihara; Editing by Jacqueline Wong, Christian Schmollinger and Ana Nicolaci da CostaOur Standards: The Thomson Reuters Trust Principles.

☆ Japan fin min warns of yen risks from Fed tightening
▼ + stars: | 2022-11-04 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +2 min

The yen has tumbled on the widening spread between U.S. and Japanese interest rates, with the Fed's aggressive interest rates hikes contrasting sharply with the Bank of Japan's massive monetary stimulus. The minister echoed Bank of Japan Governor Haruhiko Kuroda's recent caution about any spill-over effects from aggressive monetary policy tightening by the United States on Japan and other countries. The Fed raised interest rates by three-quarters of a percentage point this week, signalling that it may be near a turning point in its aggressive monetary policy tightening. The Japanese yen rose a marginal 0.07% to 148.155 per dollar on early trade on Friday, hovering below its 32-year low near 152 yen. Turning to currency intervention, Suzuki said Japan was not targeting any specific levels when intervening in the currency market to prop up the yen.

☆ Caution creeps into world stocks as Fed gets ready to hike big again
▼ + stars: | 2022-11-02 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

Another aggressive rate hike to contain hot inflation when the Fed conclides its two-day meeting later is anticipated. For markets, the key question is whether the Fed will also signal it could slow additional rate hikes, in a so-called dovish pivot. European stock markets opened higher, but moved lower as the day wore on. U.S. stock futures, which provide an indication of how Wall Street will open, also lost some of their strength and were mixed , . The robust dollar retreated in October on speculation the Fed might indicate a slowdown in its aggressive tightening campaign.

LONDON/TOKYO, Nov 2 (Reuters) - The dollar slipped on Wednesday as investors awaited a Federal Reserve policy decision amid speculation it might indicate a slowdown in future rate hikes. But for the December meeting, the futures market is split on the odds of a 75- or 50-bps increase. The real was 0.1% higher exchanging hands for 5.14 per dollar. YEN JUMPSThe yen , down a whopping 28% against the dollar this year, outperformed on Wednesday, with traders on alert for possible intervention around the Fed meeting. The BOJ also released minutes of its latest policy meeting, with a member saying the bank must be vigilant for an inflation overshoot, possibly caused by yen weakness.

☆ World stocks upbeat, even as Fed gets ready to hike big again
▼ + stars: | 2022-11-02 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

For markets, the key question is whether the Fed will also signal it could slow additional rate hikes, in a so-called dovish pivot. European stock markets opened mostly firmer (.STOXX), Asian shares outside Japan rallied to a two-week high (.MIAPJ0000PUS) and U.S. equity futures pointed to a firm open for Wall Street , . Cummins expects the Fed to step down to a 50 bps hike in December. It fell 0.75% against the Japanese yen to 147.16 yen amid fears of intervention from authorities and thin liquidity. The robust dollar has pulled back in October on speculation the Fed might indicate a slowdown in its aggressive tightening campaign.

☆ Morning Bid: Downbeat on the downshift
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. The recent burst of stock market optimism around the world still seems to be on shaky ground. Despite expectations the U.S. Federal Reserve will signal a much-vaunted 'downshift' in its rate rise campaign from next month - following a fourth straight 75 basis point rise on Wednesday - the incoming economic numbers won't play ball. The other slightly peculiar source of global market optimism this week has been unverified speculation over the past 48 hours that China will ease its draconian zero COVID rules in March. In Europe, markets awaited the Bank of England's latest interest rate decision on Thursday - with the bank's biggest rate rise in 33 years forecast.

LONDON/TOKYO, Nov 2 (Reuters) - The U.S. dollar slipped on Wednesday as investors awaited for the U.S. Federal Reserve's policy decision amid speculation it might indicate a slowdown in future rate hikes. But for the December meeting, the futures market is split on the odds of a 75- or 50-bps increase. It will be a difficult balance to strike for Powell," said Daria Parkhomenko, FX strategist at RBC Capital Markets. Against the weakening dollar, the euro and sterling edged up to $0.9889 and $1.1494, respectively. YEN JUMPSThe yen , down a whopping 28% against the U.S. dollar this year, outperformed, with traders on alert for possible intervention around the Fed meeting.

☆ Asian shares rise, dollar dips ahead of Fed policy decision
▼ + stars: | 2022-11-02 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

European markets looked set to extend the cautious optimism, with the pan-region Euro Stoxx 50 futures up 0.5%. However, traders are split on the size of the hike in December, with futures market pricing in a 44.5% probability of a 50-bps increase, according to CME's Fed tool. It fell 0.5% against the Japanese yen to 147.6 yen amid fears of intervention from authorities and thin liquidity. In commodities, oil climbed after industry data showed a surprise drop in U.S. crude stockpiles, suggesting demand is holding up. U.S. crude oil futures rose 1.4% to $89.65 per barrel, while Brent crude futures was up 1.2% at $95.82.

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