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☆ BOJ's Ueda keeps free hand, says no time frame for achieving price goal
▼ + stars: | 2023-06-02 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

The BOJ's target remained elusive until last year, when supply constraints and a spike in commodity costs caused by the COVID-19 pandemic and the war in Ukraine drove up Japan's core consumer inflation near 4%. "The time it takes for the impact of monetary policy to appear on the economy could move around a lot depending on circumstances. We therefore do not have any time frame in mind," Ueda said on Friday. Given it will take more time to achieve our price target, we will maintain the easy policy," he said, when asked by an opposition lawmaker on the likelihood of selling the BOJ's holdings. "Given uncertainty over the outlook, clarifying a set time frame for achieving our price target could have unexpected impact on financial markets," Ueda said.

Persons: Kazuo Ueda, Haruhiko Kuroda, Ueda, We'll, Leika Kihara, Chang, Ran Kim, Shri Navaratnam, Kim Coghill, Simon Cameron, Moore Organizations: Bank of Japan, Monetary, Thomson Locations: TOKYO, Ukraine

☆ Bank of Japan debated risk of inflation overshoot in March
▼ + stars: | 2023-05-08 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

A few of the nine-member board also said they saw some "positive signs" emerging in Japan that suggest the economy was making progress towards achieving the BOJ's 2% target, the minutes of the March 9-10 meeting showed. The board debated how companies were continuing to hike prices to pass on rising raw material costs, and price increases broadening to services, the minutes showed. While some saw positive signs emerging on the price front, many members said there was "extremely high" uncertainty over Japan's economic outlook that warranted keeping monetary policy ultra-loose, the minutes showed. Another member said any debate of a policy shift must be made cautiously as a reversal of ultra-loose policy would have wide-ranging effects on the public, the minutes showed. The March meeting was the final one chaired by Haruhiko Kuroda, who retired as governor in April and was succeeded by Kazuo Ueda.

☆ BOJ’s new governor has relaxed debut
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +2 min

What once looked solely like temporary “cost-push” hikes engendered by volatile energy and food prices are starting to look more entrenched. Instead Ueda kept YCC in place and tweaked the forward guidance to remove reference to pandemic-related risks. The BOJ predicts inflation will fall back below 2% soon and plans a policy review over the next year or so. That suggests the BOJ is more worried about weak growth – it expects 1.4% this fiscal year - than inflation. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ EUROPE US recession worries weigh in Asia
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Kevin BucklandEurope wakes up to more weakness in equities after stock markets across Asia took cues from Wednesday's slump on Wall Street. But perhaps reassuringly, financials fared relatively better in markets including Hong Kong and Tokyo, suggesting little fear of widening contagion from First Republic's woes. Technology shares in the region didn't benefit much from Microsoft's earnings boost though, which had buoyed the Nasdaq. Meanwhile, the United States continued to cozy up to long-time regional allies South Korea and Japan. Away from geopolitics, the Bank of Japan began its first policy meeting with new governor Kazuo Ueda at the helm.

☆ Asia markets lower as new Bank of Japan chief chairs first policy meeting
▼ + stars: | 2023-04-27 | by ( Lim Hui Jie | ) www.cnbc.com time to read: +1 min

A Japanese national flag flies outside the Bank of Japan headquarters in Tokyo, Japan, on Sept. 27, 2021. The Japanese central bank has for years adopted ultra-easy monetary policy in a bid to achieve its ever elusive inflation target. Asia-Pacific market were lower on Thursday as investors focus on the Bank of Japan's first policy meeting led by new BOJ governor Kazuo Ueda. Ueda is expected to maintain the ultra loose monetary policy of predecessor Haruhiko Kuroda for now, but expectations are that he will plot a path out of this policy in the future, according to media reports. Hong Kong's Hang Seng index also seems set for a lower open as futures tied to the index traded at 19,735, compared to the 19,757 close on Wednesday.

Dealers say BOJ efforts to make short selling more expensive have also worked and that investors are simply avoiding the market, rather than crowding into bets on yields rising. Nearly 90% of economists polled by Reuters said they expect no policy change. Ueda's most recent remarks have stressed the need to keep policy settings loose for now, without ruling out the possibility of future changes. On Sunday the Sankei newspaper reported the BOJ is considering a review of the impact of its policy settings, which could foreshadow changes. Nomura strategist Naka Matsuzawa said the path ahead would be a balance between getting a policy change done, and improving communication.

☆ New BOJ chief's first task may be to tweak forward guidance
▼ + stars: | 2023-04-26 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

A shift to a less dovish bias could signal a near-term tweak to YCC, analysts say. GUIDANCE QUESTIONSUeda left few clues on how soon the guidance could change, telling an inaugural news conference on April 10 that the board will "discuss all options at each of our policy meetings." Under current projections made in January, the BOJ expects core consumer inflation to hit 1.6% this year and 1.8% in fiscal 2024. Many analysts expect the BOJ to project inflation to hover near, but stay slightly below, the bank's 2% target for both fiscal 2024 and 2025. Ueda is expected to hold a news conference after the policy meeting on Friday to explain the bank's decision.

☆ BOJ's Ueda sees tough balance in combating cost-push inflation
▼ + stars: | 2023-04-26 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Summary Striking right balance on growth, inflation difficult - UedaJapan likely to see cost-push inflation subside - UedaUeda to chair first BOJ policy meeting this weekTOKYO, April 26 (Reuters) - Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank's response to cost-push inflation would depend on economic conditions. "In general, dealing with cost-push inflation is very difficult for central banks. On the other hand, you don't want to tighten monetary policy knowing that cost-push inflation will cool the economy," Ueda told parliament. Ueda added that Japan will see cost-push inflation subside as prices of imported raw materials have likely peaked. Ueda's comments compare with those of his predecessor Haruhiko Kuroda, who repeatedly brushed aside the chance of responding to cost-push inflation with monetary policy.

☆ Dollar edges lower; on track for second straight monthly loss
▼ + stars: | 2023-04-24 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The U.S. dollar dipped against most major currencies in early Asia trade, with the euro and sterling rising 0.05% to $1.0994 and 0.02% to $1.2447, respectively. "There's nothing, as yet, to hang your hat on rate cuts in the second half of the year." Elsewhere, the kiwi gained 0.07% to $0.6143, while the U.S. dollar index slipped 0.02% to 101.66. The index was eyeing a monthly loss of close to 0.9%, having fallen more than 2% in March. In Asia, the Bank of Japan's policy meeting this week takes centre stage, as it marks the first meeting to be chaired by new BOJ Governor Kazuo Ueda.

☆ Dollar slides as rate cuts priced in; yen falls ahead of BOJ meeting
▼ + stars: | 2023-04-24 | by ( ) www.cnbc.com time to read: +3 min

The dollar fell to a more than one-week low against major currencies on Monday in generally thin trading, as investors continued to price in interest rate cuts this year by the Federal Reserve after a widely expected rate increase at next week's policy meeting. Fed policymakers are widely expected to raise rates by another 25 bps at next week's meeting, but they are seen pausing in June. The rate futures market has also factored in roughly 50 bps of rate cuts by the end of the year. There were likewise hawkish remarks from Belgian central bank chief and ECB policy maker Pierre Wunsch. Beyond the excitement of the euro/yen cross, currency markets were quiet, as traders waited for key central bank meetings, the first of which is the BOJ on Friday, the first Ueda will chair.

This comes as month-end approaches and investors look ahead to the U.S. central bank's May 2-3 policy meeting. The advance estimate of first-quarter U.S. GDP growth is out this week, and big tech earnings from Alphabet, Microsoft and Amazon are due. Tesla shares fell 13% last week after an earnings miss, the biggest fall in almost a year. Ueda has insisted that the current policy will remain in place for now, damping down prospects of a shift this week. The central bank's revised inflation and growth forecasts might also give a clue as to when it will tweak or abandon YCC.

☆ BOJ unlikely to move in April, most economists say: Reuters poll
▼ + stars: | 2023-04-21 | by ( Kantaro Komiya | ) www.reuters.com time to read: +3 min

The BOJ will likely keep YCC unchanged at next week's meeting as it awaits more evidence of sustained wage growth, sources have told Reuters. Only three of 27 economists, or 11%, said the BOJ will start to scale-back its monetary stimulus next week, whereas 11 (41%) opted for the June meeting, the April 12-19 poll showed. He added the lowered U.S. and Japanese yields after the financial turmoil also decreased the urgency to tweak YCC, which has previously faced market attacks to break the upper limit. Compared with the March poll, fewer economists expect a sudden abolition of YCC to come without warning. Half of the 24 respondents anticipated another YCC tweak, if not an outright end, in April-June.

☆ Japanese firms want stability rather than change from new BOJ governor: Reuters poll
▼ + stars: | 2023-04-19 | by ( Tim Kelly | ) www.reuters.com time to read: +3 min

Summary 52% of firms want the BOJ to help stabilize financial marketsFewer firms want end to BOJ zero rate policyA third of firms want the BOJ to stick with current policies16% of firms want revision to 2% inflation targetTOKYO, April 20 (Reuters) - Most Japanese firms want Bank of Japan Governor Kazuo Ueda to focus on financial market stability at his first policy meeting next week, with few seeing benefits from any easing of its ultra-loose monetary policy, a Reuters monthly poll showed. Of nearly 500 major companies polled, 52% said they hoped for financial stability measures, with a third saying Ueda should maintain the policies of his predecessor, Haruhiko Kuroda. Slightly less than a quarter of the Japanese firms surveyed by Reuters said they wanted a revision of the BOJ's negative interest rate policy, down from nearly a half two months ago when Ueda was nominated to his post. Fewer companies also urged the central bank to revise its inflation target, down to 16% from 28% of those polled in February. The Reuters Corporate Survey, conducted for Reuters by Nikkei Research between April 5 and April 14, canvassed 493 big non-financial Japanese firms, including 246 manufacturers and 247 non-manufacturers.

☆ New BOJ chief's message to world: We're staying the course - for now
▼ + stars: | 2023-04-17 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

Under YCC, the BOJ guides short-term rates at -0.1% and the 10-year Japan government bond yield around zero with an implicit cap of 0.5%. "We're in an economy where we're going to be hit more by supply shocks, and monetary policy will face more serious trade-offs," she said on Friday. Ranil Salgado, the IMF's Japan mission chief, sees scope for the BOJ to modify the long-term yield target this year, given heightening prospects of durable wage growth. As long as the short-term rates remain zero or slightly negative, the BOJ can keep monetary policy accommodative even if it tweaks the yield target, he said. "We are advising (the BOJ) to pretty much already be thinking about it," Salgado said on the idea of tweaking YCC.

☆ Analysis: New BOJ head's message to world: We're staying the course - for now
▼ + stars: | 2023-04-16 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

☆ New BOJ chief Ueda sticks to upbeat view on wages, global economy
▼ + stars: | 2023-04-14 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

"The BOJ's forecasts already take into account the chance of a global economic slowdown. But they don't see a severe global recession as a baseline projection," Ueda told a news conference on Thursday after attending the Group of 20 (G20) finance leaders' meeting in Washington. "As our base scenario is for global growth to pick up after a period of slowdown, Japan's wages will likely keep rising," he said. Markets are focusing on the BOJ's first policy meeting chaired by Ueda to be held on April 27-28, when the board will produce fresh quarterly growth and inflation forecasts extending through fiscal 2025. I'll think about it closely once I'm back," Ueda said, when asked about prospects for the April policy meeting.

☆ Ex-BOJ chief Kuroda tapped for job at university in Tokyo
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +1 min

TOKYO, April 12 (Reuters) - Former Bank of Japan Governor Haruhiko Kuroda has received a job offer from a prestigious university in Tokyo, days after retiring from the helm of the central bank, a university official told Reuters on Wednesday. Kuroda will become a senior academic fellow at National Graduate Institute for Policy Studies (GRIPS), a job aimed at making use of his rich experience for teaching students, many of whom are from Asia, the official said. "We have commissioned the post of senior fellow to Kuroda as of yesterday. His job is based on basic research, but he will also give lectures from autumn, as per his intention," Takahiro Okamoto, a GRIPS official told Reuters, adding that details have not yet been decided. Kuroda served as BOJ governor from March 2013 to April 8, after having been the Asian Development Bank president and Japanese vice finance minister for international affairs.

☆ Living standards are still falling in Japan. That’s a recipe for more stagnation
▼ + stars: | 2023-04-12 | by ( Michelle Toh | ) edition.cnn.com time to read: +5 min

Adjusted for inflation, wages slipped 2.6% in February, compared to the same month a year earlier, according to government data released last week. That means it’ll be tough for Ueda to hike interest rates, especially as living standards aren’t rising either. The issue of stagnant wages could improve this year, as companies heed the call to raise salaries in response to inflation. Workers in Japan have been grappling with stagnant wages, leading to a government push for businesses to hike pay. But in Japan, it’s high enough to feel uncomfortable, given stagnant wage growth, according to Angrick.

☆ Analysis: Japan's upbeat wages may keep new BOJ chief on hook for policy tweak
▼ + stars: | 2023-04-11 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

However, a widely expected upgrade in the Bank of Japan's price forecasts due this month may show inflation staying near 2% for several years. "The BOJ will probably upgrade its price forecasts this month. In doing so, it could offer new guidance on future policy and tweak YCC around summer or autumn," she said. With more firms hiking prices and employees' pay, the BOJ may revise up the forecasts and see inflation stay around 2% through fiscal 2025, analysts say. "The BOJ may see scope to tweak YCC as early as June," he said.

There was more movement in currency markets, where the dollar rose across the board and the yen sank. Producer price inflation is expected to have fallen further in March, according to analysts' estimates of a year-on-year decline of 2.5%, which would be the fastest pace of deflation since June 2020. The annual rate of consumer price inflation is expected to remain unchanged at 1.0%, the slowest in a year, and the monthly rate is expected to rise to 0% from -0.5% in February. If these forecasts are broadly accurate, price pressures in China would appear to be extremely benign, giving the central bank room to loosen policy and stimulate the economy. In South Korea, the central bank looks to have ended its tightening cycle and will likely keep its main interest rate on hold at a 15-year high of 3.50% on Tuesday.

But Ueda said the Bank of Japan (BOJ) must also avoid being too late in normalising monetary policy, a sign he will be more open to the idea of tweaking its controversial bond yield control policy than his dovish predecessor Haruhiko Kuroda. "If the BOJ suddenly realises that inflation will stably and sustainably hit 2% and decides to normalise monetary policy, it will have to make very big policy adjustments," Ueda said in an inaugural news conference on Monday. The dollar extended its gains against the yen to hit 133.055 , the highest since April 4, on receding expectations of a near-term tweak to Japan's ultra-loose monetary policy. PRICE TRENDS HOLD KEYIf the BOJ sees that it can achieve its price target, it might need to normalise monetary policy, Ueda said. But the BOJ must sustain Kuroda's stimulus programme for the time being, including YCC, remarks that diminish the chance of a policy shift at this month's policy meeting.

[1/3] New Governor of Bank of Japan Kazuo Ueda waits for Japanese Prime Minister Fumio Kishida before their meeting at prime minister?s official residence in Tokyo, Japan, April 10, 2023. "Given high economic uncertainty, the BOJ will communicate closely with the government and guide monetary policy flexibly," Ueda told reporters after meeting with Prime Minister Fumio Kishida to receive his official appointment letter. In parliamentary confirmation hearings in February, Ueda has stressed the need to keep ultra-easy policy to ensure Japan sustainably achieves the BOJ's 2% inflation target backed by wage growth. Ueda will chair his first policy meeting on April 27-28, when the board produces fresh quarterly growth and price forecasts extending through fiscal 2025. Ueda served as BOJ board member from 1998 to 2005, during which the central bank introduced zero interest rates and then quantitative easing to combat deflation and economic stagnation.

☆ Asian shares muted, dollar buoyant on odds of rate rise
▼ + stars: | 2023-04-10 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.12% higher, while Japan's Nikkei (.N225) gained 0.5%. Traders have increasingly become convinced that the Fed will cut rates in the second half to ward off an economic downturn. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, eased to 3.951%, after closing at 3.993% on Friday's abbreviated trading. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at -57.7 basis points. The yen weakened 0.41% to 132.69 per dollar as Japan's new central bank governor Kazuo Ueda takes over from Haruhiko Kuroda.

☆ Yen sinks as rates outlook diverges; NZ dollar tumbles
▼ + stars: | 2023-04-10 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

The yen slipped 0.4% against the U.S. dollar to 132.70, extending its decline from Friday, when data showed the U.S. economy continued to add jobs at a brisk pace in March. The yield remained elevated at 3.3719% in Tokyo on Monday, when many markets in Asia as well as Europe will remain closed. Against the euro , the yen slumped over 0.5% to 144.635. Barring an upside surprise in U.S. consumer price data on Wednesday, the dollar has limited room to rise against the yen from current levels, they added. Meanwhile, the New Zealand dollar slumped about 0.7% to $0.62325, and the Aussie slipped 0.13% to $0.6665.

☆ Yen sinks as rates outlook diverges; NZ dollar slides
▼ + stars: | 2023-04-10 | by ( Kevin Buckland | ) www.reuters.com time to read: +2 min

Meanwhile, the risk-sensitive New Zealand and Australian dollars weakened amid heightened U.S.-China tensions over Taiwan, with Beijing a key trading partner for the Antipodean nations. The yen slipped 0.3% against the U.S. dollar to 132.47, extending a similar-sized decline from Friday, when data showed the U.S. economy continued to add jobs at a brisk pace in March. The yield remained elevated at 3.3776% in Tokyo on Monday, when many markets in Asia as well as Europe will remain closed. Barring an upside surprise in U.S. consumer price data on Wednesday, the dollar has limited room to rise against the yen from current levels, they added. Meanwhile, the New Zealand dollar slumped 0.6% to $0.6238, and the Aussie slipped 0.21% to $0.6660.

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