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☆ Japan's wholesale inflation slows, may ease pressure on BOJ
▼ + stars: | 2023-05-15 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

The data may diminish market expectations that broadening inflationary pressure will prod the Bank of Japan to seek an early exit from ultra-low interest rates. "Having said that, we'll likely see price growth slow as import-driven inflationary pressure is already subsiding." Analysts are closely watching moves in wholesale prices, considered a leading indicator of consumer price trends, for clues on whether consumer inflation will heighten enough for the BOJ to phase out its massive stimulus. Japan's core consumer inflation hit 3.1% in March and an index excluding fuel costs rose at the fastest annual pace in four decades in a sign of broadening price pressure. BOJ Governor Kazuo Ueda has said the central bank will keep monetary policy ultra-loose unless the recent rise in consumer inflation is driven more by robust domestic demand, and accompanied by higher wage growth.

☆ Japan March export growth slows, annual trade deficit widens to record
▼ + stars: | 2023-04-20 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Import growth outpaced exports in March, due to the hefty cost of coal, crude and oil products, helping bring the annual trade deficit in the world's third-biggest economy to a record 21.7 trillion yen ($161 billion). It exceeded the previous record of 13.7 trillion yen in fiscal 2013. Analysts say Japan's trade deficit will persist for the time being as exports weaken. "Effects of the fully-fledged monetary tightening in the West since last summer will play out in their economies, causing Japan's exports to turn downward going forward." By region, exports to the United States grew 9.4% in the year to March, slowing from the 14.9% seen in the previous month.

The service-sector mood, by contrast, recovered as easing border controls and an end to COVID-19 curbs heightened hopes for a rebound in tourism and consumption, the Bank of Japan's tankan survey showed. Takeshi Minami, chief economist at Norinchukin Research Institute, expects external factors, such as the fallout from U.S. and European monetary tightening, to weigh on Japan's exports and business sentiment. "Given the fragile nature of Japan's recovery, the BOJ is not in a situation where it can normalise monetary policy anytime soon," he said. Big firms plan to raise capital expenditure by 3.2% in the fiscal year that began in April, less than market forecasts for a 4.9% gain, the tankan showed. Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ Japan's business mood sours to 2-year low as global slowdown bites, Tankan survey shows
▼ + stars: | 2023-04-03 | by ( ) www.cnbc.com time to read: +2 min

Japan's business sentiment soured in January-March to hit the worst level in more than two years, the closely-watched tankan survey showed on April 3, 2023. Akio Kon | Bloomberg | Getty ImagesJapan's business sentiment soured in January-March to hit the worst level in more than two years, a closely-watched central bank survey showed on Monday, as slowing global growth clouds the outlook for the export-reliant economy. The service-sector mood, by contrast, recovered as easing border controls and an end to Covid-19 curbs heightened hopes for a rebound in tourism and consumption, the Bank of Japan's tankan survey showed. It was the fifth straight quarter of deterioration and the worst level hit since December 2020. Given the fragile nature of Japan's recovery, the BOJ is not in a situation where it can normalize monetary policy anytime soon.

The world's third-biggest economy has struggled to make a solid post-COVID recovery, undermined by lacklustre household consumption and a global slowdown. Slowing shipments to China, which fell for a third straight month, have also shattered policymakers' hopes for a quick rebound from the pandemic doldrums. Exports to China, Japan's largest trading partner fell 10.9% year-on-year in February, registering a second straight month of double-digit decline, as demand weakened for cars, auto parts and display-making equipment. Japan has now posted a trade deficit for 19 straight months. "Chances are 50-50 that Japan may slide into recession," said Takeshi Minami, chief economist at Norinchukin Research Institute.

[1/3] FILE PHOTO-A woman in a traditional costume makes her way at a shopping district in Tokyo, Japan November 15, 2022. "From a negative growth in July-September, the rebound isn't very impressive," said Toru Suehiro, chief economist at Daiwa Securities. But it's difficult to project a strong recovery partly due to pressure from rising inflation," he said. RECESSION RISKSFor the full year, the economy expanded 1.1% compared with a 2.1% increase in 2021, the data showed. Economy minister Shigeyuki Goto told reporters the economy was on course for a recovery as the pandemic's impact fades.

Ueda, a 71-year-old former Bank of Japan (BOJ) policy board member, will succeed incumbent Haruhiko Kuroda, whose second, five-year term ends on April 8, according to documents presented to parliament on Tuesday. Analysts expect Ueda, who had warned of the dangers of premature interest rate hikes in the past, to hold off on tightening monetary policy. "Ueda is likely to focus on theory and empirical analysis in guiding monetary policy," said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities. Upon parliament's approval, Ueda will chair his first BOJ policy meeting on April 27-28. A soft-spoken academic with a PhD from the Massachusetts Institute of Technology, Ueda is seen as a pragmatist who can adjust his views on monetary policy flexibly.

☆ Japan's wholesale inflation stays elevated, keeps BOJ under pressure
▼ + stars: | 2023-02-10 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Japan's core consumer prices rose 0.3 percent in April from a year earlier, government data showed on May 29, keeping inflation distant from the central bank's 2 percent target. The increase in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, largely met a median market forecast for a 9.6% gain. The index, at 119.8, matched a record high hit in December, Bank of Japan (BOJ) data showed. "Firms have yet to fully pass on past rises in input costs, which is keeping inflationary pressure high," said Takeshi Minami, chief economist at Norinchukin Research Institute. "We expect the pace of inflation to gradually slow in the latter half of fiscal 2023," he told parliament.

☆ Big opportunity for Japan and India to collaborate on carbon neutrality: Japanese government body
▼ + stars: | 2023-02-08 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBig opportunity for Japan and India to collaborate on carbon neutrality: Japanese government bodyRyo Minami, director-general for International Policy on Carbon Neutrality at Japan's Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry, says Japan has "good cooperation" with the United States, Europe and Asia.

☆ Japan's sharp wholesale price rise heaps pressure on BOJ's ultra-easy policy
▼ + stars: | 2023-01-16 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

The 10.2% year-on-year rise in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, exceeded a median market forecast for a 9.5% gain, Bank of Japan data showed. "While inflationary pressure from imports is easing, firms are still passing on rising input costs at home," said Takeshi Minami, chief economist at Norinchukin Research Institute. "But such price pressure will gradually weaken with commodity inflation peaking out, and major economies likely to stagnate in the first half of this year," he said. For 2022, wholesale prices rose 9.7% on average from the previous year, hitting a record high since comparable data became available in 1981. Data due out on Friday is expected to show Japan's core consumer prices rose 4.0% in December, double the BOJ's 2% target and a fresh 41-year-high, in a sign of rising living costs for households, according to a Reuters poll.

☆ Tokyo core CPI seen up 3.8% in December, new 40-year-high
▼ + stars: | 2023-01-06 | by ( Kantaro Komiya | ) www.reuters.com time to read: +2 min

The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide inflation trends, was expected to have climbed 3.8% in December from a year earlier on widening retail price rises, according to the median estimate of 16 economists. The central bank jolted the market last month with a surprise tweak to its long-term yield cap, allowing rates to rise more. Household spending likely dropped 0.5% in November from the previous month, while it was forecast to have risen 0.5% from the same month a year earlier, according to the poll. The government will release the Tokyo CPI data and household spending data on Jan. 10 at 8:30 a.m. (Jan. 9, 2330 GMT). The current account data is due on Jan. 12 at 8:50 a.m. (Jan. 11, 2350 GMT).

☆ Japan’s consumer inflation hits fresh 40-year high
▼ + stars: | 2022-12-22 | by ( ) edition.cnn.com time to read: +4 min

Japan’s core consumer inflation hit a fresh four-decade high as companies continued to pass on rising costs to households, data showed, a sign price hikes were broadening and could keep the central bank under pressure to whittle down massive stimulus. Japan’s core consumer price index (CPI), which excludes volatile fresh food but includes energy costs, rose 3.7% in November from a year earlier, data showed Friday, matching market forecasts and perking up from a 3.6% gain in October. “We’ll likely see a rush in price hikes next year that could be more intense than this year,” as companies face rising labor and distribution costs, Teikoku Data Bank said. We can’t rule out the chance of a big overshoot in inflation,” one member was quoted as saying in the October minutes. The CPI data will likely be among key factors the BOJ will scrutinize when it produces fresh quarterly inflation forecasts at a two-day policy meeting ending on January 18.

☆ Japan's consumer inflation hits fresh 40-year high, eyes on BOJ policy
▼ + stars: | 2022-12-22 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

Japan's core consumer price index (CPI), which excludes volatile fresh food but includes energy costs, rose 3.7% in November from a year earlier, data showed on Friday, matching market forecasts and perking up from a 3.6% gain in October. Reuters GraphicsAside from utility bills, prices rose for a broad range of goods from fried chicken, smartphones to air conditioners, in a sign of mounting inflationary pressure, the data showed. But an index stripping away such one-off factors may remain elevated and keep pressure on the BOJ to remain vigilant to the chance of a demand-driven rise in inflation. "We'll likely see a rush in price hikes next year that could be more intense than this year," as companies face rising labour and distribution costs, Teikoku Data Bank said. The CPI data will likely be among key factors the BOJ will scrutinise when it produces fresh quarterly inflation forecasts at a two-day policy meeting ending on Jan. 18.

☆ 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.

☆ Japan upgrades Q3 GDP as global recession, COVID risks linger
▼ + stars: | 2022-12-08 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Japan's economy unexpectedly shrank in the third quarter as global recession risks, China's faltering economy, a weak yen and higher import costs hurt consumption and businesses. However, others are bracing for the global economy to tip into a recession next year, dealing a sharp blow to trade-reliant Asian exporters such as Japan. Before annualising, third-quarter GDP was down 0.2% on the previous quarter, compared with the initial contraction estimate of 0.3%. Among key sectors, private consumption, which makes up more than half of Japan's GDP, helped drive growth, though it was revised down. However, a weak yen and hefty import bills, which boost the cost of living, more than offset GDP growth contributors.

For October-December, (Japan's) production will likely be almost flat or slightly decrease from the previous quarter," said Shumpei Fujita, economist at Mitsubishi UFJ Research and Consulting, pointing to the global economic slowdown as a culprit. Factory output fell 2.6% in October from a month earlier on a seasonally adjusted basis, government data showed on Wednesday. Production machinery output slipped 5.4%, taking a hit from soft demand for equipment to make semiconductors and flat-panel displays. While output of compact cars for the domestic market grew, production and shipment of export-oriented larger vehicles was down due to chip shortages, the METI official said. The impact of China's recent lockdown remains unclear, the METI official said, adding the spill-over effects for Japanese manufacturers may only appear in November or December statistics.

☆ 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.

☆ Japan economy set to slow sharply as global inflation, recession risks hurt- Reuters poll
▼ + stars: | 2022-11-04 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

TOKYO (Reuters) - Japan’s economy is expected to have slowed markedly in the third quarter as global recession risks hurt external demand while rising inflation and a weak yen’s impact on imported prices forced consumers to keep their wallets shut. Slideshow ( 3 images )Gross domestic product (GDP) data due 0850 local time Nov. 15 (2350 GMT Nov. 14) will likely show the world’s No. 3 economy grew at an annualised rate of 1.1% in July-Septerber, sharply slower from the 3.5% expansion in the second quarter. Household spending data will be released 0830 JST Nov. 8/ 2330 GMT Nov. 7 and corporate goods price index is due 0850 JST Nov. 11/ 2350 GMT Nov. 10. Ministry of Finance (MOF) data, due out 0850 JST Nov. 9/ 2350 GMT Nov. 8 will likely show current account came to 234.5 billion yen ($1.58 billion) in September.

☆ Japan economy set to slow sharply as global inflation, recession risks hurt
▼ + stars: | 2022-11-04 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Gross domestic product (GDP) data due 0850 local time Nov. 15 (2350 GMT Nov. 14) will likely show the world's No. 3 economy grew at an annualised rate of 1.1% in July-Septerber, sharply slower from the 3.5% expansion in the second quarter. "Supply-side restrictions have also curbed car output," he said, adding that "depending on the extent of slowdown in the global economy, Japan could follow suit and you cannot rule out the possibility that it slides into recession next year." Household spending data will be released 0830 JST Nov. 8/ 2330 GMT Nov. 7 and corporate goods price index is due 0850 JST Nov. 11/ 2350 GMT Nov. 10. Ministry of Finance (MOF) data, due out 0850 JST Nov. 9/ 2350 GMT Nov. 8 will likely show current account came to 234.5 billion yen ($1.58 billion) in September.

☆ Japan's consumer inflation hits 8-year high in test of central bank's dovish policy
▼ + stars: | 2022-10-21 | by ( ) www.cnbc.com time to read: +1 min

Japan's core consumer inflation rate accelerated to a fresh eight-year high of 3.0% in September, exceeding the central bank's 2% target for the sixth straight month as the yen's slump to 32-year lows continue to push up import costs. The inflation data highlights the dilemma the Bank of Japan faces as it tries to underpin a weak economy by maintaining ultra-low interest rates, which in turn are fueling an unwelcome slide in the yen that pushes up import costs. The increase in the nationwide core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, matched a median market forecast and followed a 2.8% rise in August. It was the fastest pace of gain since September 2014, data showed on Friday. "The current price rises are driven mostly by rising import costs rather than strong demand.

The inflation data highlights the dilemma the Bank of Japan faces as it tries to underpin a weak economy by maintaining ultra-low interest rates, which in turn are fuelling an unwelcome slide in the yen that pushes up import costs. The increase in the nationwide core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, matched a median market forecast and followed a 2.8% rise in August. "The current price rises are driven mostly by rising import costs rather than strong demand. The data heightens the chance the BOJ will revise up its consumer inflation forecasts in new quarterly forecasts due at next week's policy meeting, analysts say. With Japan's inflation still modest compared with price rises seen in other major economies, the BOJ has pledged to keep interest rates super-low, remaining an outlier in a global wave of monetary policy tightening.

☆ Japan Sept consumer inflation seen at 8-year high, above BOJ's target for 6th month: Reuters poll
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +2 min

The forecast strongly suggested that core CPI would stay above the central bank's 2% inflation target for a sixth consecutive month. Governor Haruhiko Kuroda has repeatedly vowed to keep the BOJ's stimulus effort intact, because any cost-push rise in inflation would be temporary. It would be the 14th straight month of deficits and follow a record 2.817 trillion yen shortfall in August. Imports by value likely surged 45.0% in September from a year earlier, outpacing a 27.1% rise in exports, the poll showed. The government will release the consumer price data on Oct. 21 at 8:30 a.m. (Oct. 20, 2330 GMT) and the trade balance data on Oct. 20 at 8:50 a.m. (Oct. 19, 2350 GMT).

☆ Bank of Japan keeps ultra-low rates, dovish policy guidance
▼ + stars: | 2022-09-22 | by ( ) www.reuters.com time to read: +11 min

Sept 22 (Reuters) - The Bank of Japan maintained ultra-low interest rates and dovish policy guidance on Thursday, reassuring markets that it will continue to swim against a global tide of central banks tightening monetary policy to combat soaring inflation. "However, we believe that the BOJ will never allocate monetary policy for the FX rate adjustment and will stick to the YCC policy. "The most important thing is how the foreign-exchange rate reacts to that contrast in monetary policy between the U.S. and Japan. It also leaves the impression there will be no change in monetary policy during Kuroda's remaining term." He has said lesser about any merit of the weak yen recently out of consideration towards public sentiment against rising costs of living."

☆ BOJ's dovish deputy Amamiya top candidate as next head: Reuters poll
▼ + stars: | 2022-09-21 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

As Kuroda's right-hand man, he has consistently called for the need to keep monetary policy ultra-loose to ensure Japan makes a sustained exit from deflation. Like Amamiya, Nakaso is considered a safe pair of hands with his expertise on central bank affairs. The BOJ's dovish stance has made it an outlier among a global wave of central banks tightening monetary policy to combat surging inflation. "While Kuroda is at the helm, the BOJ's ultra-loose monetary policy won't change," said Takeshi Minami, chief economist at Norinchukin Research Institute. "But under a new leadership, the bank could reassess its view on the inflation outlook and thinking on monetary policy."

Register now for FREE unlimited access to Reuters.com Register"The weak yen is importing inflation into Japan. Core consumer inflation is set to top 3% in October," said Takeshi Minami, chief economist at Norinchukin Research Institute. Analysts expect core consumer inflation to exceed 3% in October, when many retailers plan to raise prices and the base effect of more 2021 cellphone fee cuts will drop out of the calculation. While goods prices were 5.7% higher in August than a year earlier, services prices gained just 0.2%, the CPI data showed. But its recovery has been hobbled by a resurgence in COVID-19 infections, supply constraints and rising raw material costs.

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