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TOKYO, May 2 (Reuters) - Banking sector problems in the United States and Europe were caused by liquidity and interest rates risks, but won't impact on Japan's economy and financial system for now, Economy Minister Shigeyuki Goto said on Tuesday. Financial institutions and authorities will need to respond firmly to liquidity risks," Goto said. "I don't see the U.S. financial sector facing big problems." "The BOJ as central bank should tackle monetary policy operations, but I don't see the current financial situation impacting Japan's economy and financial sector as a whole. "I expect the BOJ to guide monetary policy flexibly, meaning that the central bank should do so appropriately taking economy and financial markets into account."

☆ South Korea and Japan's finance ministers to hold first bilateral talks in 7 years
▼ + stars: | 2023-04-17 | by ( ) www.reuters.com time to read: +1 min

SEOUL/TOKYO, April 17 (Reuters) - South Korea and Japan's finance ministers will hold a bilateral meeting early next month for the first time in seven years, heralding closer cooperation in economic policy that has been hampered by diplomatic conflict. South Korean Finance Minister Choo Kyung-ho told reporters during a visit to the United States that he has agreed to meet Japanese Finance Minister Shunichi Suzuki, according to a media pool report. "It is significant in that it will be the first step toward reviving regular bilateral meetings," Choo said, without elaborating. Regular annual meetings between the two countries' finance ministers have been suspended since 2016 due to disputes over wartime history. Financial markets will likely pay close attention to whether the finance ministers will discuss resuming a bilateral currency swap arrangement - one that had served as backstop against any potential currency crisis but which expired in February 2015.

☆ Security of Europe, Indo-Pacific in focus as G7 foreign ministers gather
▼ + stars: | 2023-04-14 | by ( Sakura Murakami | ) www.reuters.com time to read: +3 min

TOKYO, April 14 (Reuters) - Foreign ministers of the Group of Seven nations will focus on the security of both Europe and the Indo-Pacific as they gather in Japan from Sunday against a worrying backdrop of the war in Ukraine and China's growing assertiveness. "The security of Europe and that of the Indo-Pacific cannot be discussed separately - they are intertwined with each other," a Japanese foreign ministry official said of the upcoming meeting, speaking on condition of anonymity. Kishida visited Ukraine in March, at the same time the China's President Xi Jinping was meeting Russian President Vladimir Putin in Moscow. "The G7 has been an important partner in holding Russia accountable for its aggression in Ukraine," U.S. State Department Deputy Spokesperson Vedant Patel said on Monday. "I have no doubt that the G7 will continue to play an important role in that, including at the upcoming foreign ministers' 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.

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.

TOKYO, April 7 (Reuters) - The Bank of Japan (BOJ) should be cautious about changing its unconventional monetary policy for now, given financial market uncertainty due to problems in Western banks, former top financial diplomat Takehiko Nakao told Reuters in an interview. Nakao made the comments amid speculation the BOJ may abandon its yield curve control policy when new Governor Kazuo Ueda takes over incumbent Haruhiko Kuroda, whose term ends on April 8. U.S. bank failures and the buyout of Credit Suisse by UBS last month have driven financial market risk aversion. Nakao said the BOJ must carefully monitor market developments, for now, although credit anxiety was unlikely to morph into anything like the 2008/09 global financial crisis. "Yet, the BOJ cannot continue unconventional monetary policy, including ETF and REIT purchases and YCC, indefinitely.

☆ Japan aims to boost hydrogen supply to 12 million T by 2040
▼ + stars: | 2023-04-04 | by ( ) www.reuters.com time to read: +2 min

TOKYO, April 4 (Reuters) - Japan is to revise its hydrogen strategy by the end of May with an ambitious target to boost annual supply to 12 million tonnes by 2040, the industry ministry said on Tuesday, as competition increases in the global market for the fuel. Citing massive hydrogen investment by the United States and Europe, Kishida said Japan will speed up the roll out of supply chains in cooperation with Australia, the Middle East, and Asia. Japan's existing goal is to increase annual hydrogen supply to about 3 million tonnes in 2030 from 2 million tonnes now, which is mainly used by oil refiners, and to expand the figure to 20 million tonnes in 2050, according to the ministry. The fuel, together with ammonia, has a major role in helping Japan to meet its target of becoming carbon neutral by 2050. ($1 = 132.6500 yen)Reporting by Yuka Obayashi, Miho Uranaka and Yoshifumi Takemoto; editing by Barbara LewisOur Standards: The Thomson Reuters Trust Principles.

The finance ministry will set up a panel of experts as early as April to discuss the feasibility of issuing a digital yen, two sources with knowledge of the matter told Reuters. The step will come after the central bank's decision to start in April a pilot programme to test the use of a digital yen, moving Japan closer to issuing a CBDC in several years. The central bank has said the pilot programme may last for several years. Some laws may need to be revised if the government were to start issuing a CBDC for public use. Public broadcaster NHK reported on Thursday the finance ministry was considering setting up an advisory panel in April to discuss the possibility of a digital yen.

Zelenskiy posted footage of him greeting Kishida, whom the Ukrainian leader called "a truly powerful defender of the international order and a longtime friend of Ukraine". It is rare for a Japanese leader to make an unannounced foreign visit. [1/5] Japanese Prime Minister Fumio Kishida visits a site of a mass grave, in the town of Bucha, amid Russia's attack on Ukraine, outside of Kyiv, Ukraine March 21, 2023. Zelenskiy, speaking at a joint briefing with Kishida, said he would join the Hiroshima summit via an online link. Prior to leaving for Poland en route to Ukraine, Kishida visited India, where he met Prime Minister Narendra Modi.

SummarySummary Companies C.banks responded to risk-aversive moves in markets - MatsunoJapan's banking system stable as a whole - MatsunoFinmin says will keep assessing impact of Credit Suisse buyoutMarket rout may complicate BOJ's exit path from easy policyTOKYO, March 20 (Reuters) - Japan's top government spokesperson said on Monday the banking system was stable, seeking to reassure markets the country won't see a contagion from U.S. and European banking sector woes. "Each country promptly ramped up efforts as risk-aversive moves were seen in financial markets," Matsuno told a regular news conference. "Japan's financial system is stable as a whole," he said, adding that authorities were watching financial market moves "with a strong sense of alarm". For now, financial authorities in Tokyo see the most likely risk for Japan coming from a deterioration in the U.S. economy that would hurt exports, rather than a direct bank contagion. "The failure of two U.S. banks spilled over to a Swiss bank in a seemingly unrelated way," one official said.

"Each country promptly ramped up efforts as risk-aversive moves were seen in financial markets," Matsuno told a regular news conference. "Japan's financial system is stable as a whole," he said, adding that authorities were watching financial market moves "with a strong sense of alarm". The remarks came after Finance Minister Shunichi Suzuki told reporters on Monday the government would continue to "carefully assess" how a weekend rescue deal for Credit Suisse Group would affect Japan's financial sector. For now, financial authorities in Tokyo see the most likely risk for Japan coming from a deterioration in the U.S. economy that would hurt exports, rather than a direct bank contagion. "The failure of two U.S. banks spilled over to a Swiss bank in a seemingly unrelated way," one official said.

☆ Factbox: What's on the table for the Kishida-Yoon summit?
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +3 min

[1/2] South Korean President Yoon Suk-yeol speaks at an interview with Reuters in Seoul, South Korea, November 28, 2022. Kishida is considering visiting South Korea as early as this summer, Kyodo has reported. G7 INVITATIONKishida may extend an invitation to Yoon to attend the G7 summit set to take place in Hiroshima in May, several media reported. EXPORT CURBSThe two leaders could confirm their countries' intention to resolve Japan's high-tech material export curbs against South Korea. Japan tightened restrictions on the export of high-tech semiconductor materials to South Korea in 2019 as a row over how to compensate wartime labourers flared.

The summit is the same week as major South Korea-U.S. military drills that routinely anger Pyongyang, and North Korea has already staged multiple missile launches - a backdrop for the message that Japan, South Korea and the United States need to close ranks. In November South Korea and Japan agreed to exchange real-time intelligence on North Korea's missile launches, which experts say will help both countries better track potential threats. "South Korea is already taking a side and entering the Cold War," said Kim Joon-hyung, a former chancellor of the Korean National Diplomatic Academy. Yoon said high-tech cooperation on supply chains between Japan and South Korea would contribute significantly to economic security. 'SHARED INTERESTS'Washington had pressed for reconciliation, but a State Department spokesperson said the recent arrangements were the result of bilateral discussions between Japan and South Korea.

With the approval, government nominee Kazuo Ueda will officially succeed incumbent BOJ Governor Haruhiko Kuroda whose second, five-year term ends on April 8. But the BOJ's current policy is a necessary, appropriate means to achieve 2% inflation," Ueda told parliament last month, signalling that he was in no rush to hike rates. "I'll succeed the policy in the context of seeking to hit the BOJ's 2% inflation stably and sustainably," Ueda replied. Hiroshi Shiratori, a professor at Japan's Hosei University, see the appointment of Ueda as a sign Kishida wants the BOJ to phase out the legacy policy of Abenomics. "Ueda is saying the BOJ will maintain low rates for now.

☆ South Korea proposes public foundation to resolve forced labour dispute with Japan
▼ + stars: | 2023-03-06 | by ( ) www.reuters.com time to read: +3 min

[1/5] South Korean Foreign Minister Park Jin speaks during a briefing announcing a plan on Monday to resolve a dispute over compensating people forced to work under Japan's 1910-1945 occupation of Korea, at the Foreign Ministry in Seoul, South Korea, March 6, 2023. REUTERS/Kim Hong-Ji/PoolSEOUL, March 6 (Reuters) - South Korea announced a plan on Monday to resolve a dispute over compensating people forced to work under Japan's 1910-1945 occupation of Korea, although victims groups have expressed doubts. Under the plan, South Korea would compensate former forced labourers through a public foundation funded by private-sector companies, Foreign Minister Park Jin told a briefing. Park said that he believes the Japanese government would not prevent Japanese companies from voluntarily contributing. Reporting by Josh Smith, Soo-hyang Choi, and Ju-min Park in Seoul and Yoshifumi Takemoto in Tokyo.

Under the plan, South Korea would compensate former forced labourers through an existing public foundation funded by private-sector companies, South Korea's Foreign Minister Park Jin told a briefing. SOUTH KOREAN FUNDSRelations plunged to their lowest point in decades after South Korea's Supreme Court in 2018 ordered Japanese firms to pay reparations to former forced labourers. Overall there are fewer than 1,300 living victims of forced labour in South Korea, according to media estimates. The South Korean companies include KT&G (033780.KS), Korea Electric Power Corp (KEPCO) (015760.KS) and other companies that benefited from a 1965 treaty between South Korea and Japan. Asked whether Japanese companies would pitch in to compensate, Park said both Japanese and South Korean businesses were considering a plan to contribute.

Kazuo Ueda, a 71-year-old university professor who has kept a low profile despite strong credentials as a monetary policy expert, ticked some important boxes. While he was not even on the list of dark horse candidates floated by the media, Ueda was well known in global central bank circles. The bank's preferred choices were incumbent deputy governor Amamiya, as well as former deputies Hiroshi Nakaso and Hirohide Yamaguchi, given their deep knowledge on monetary policy. Matsuno said he hoped the BOJ works closely with the government and guides monetary policy flexibly, when asked whether Ueda's appointment could lead to a retreat from Abenomics. While he warned of the rising cost of the BOJ's yield control policy, Ueda has called for the need to keep monetary policy loose to ensure Japan stably achieves the bank's 2% inflation target.

☆ At BOJ's helm, MIT-educated Ueda to put theory into practice
▼ + stars: | 2023-02-14 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

At MIT, he studied economics under Stanley Fischer, whose students include former U.S. Federal Reserve chair Ben Bernanke and former European Central Bank President Mario Draghi. He is a good listener and a consensus-builder, rather than a leader with a strong view on the direction of monetary policy, they say. "His style is to discuss monetary policy based on facts and evidence," said Tetsuya Inoue, who was Ueda's staff secretary when he was a central bank board member. In a column published in July, Ueda warned against raising rates prematurely in response to cost-push inflation - a sign he would be in no rush to tighten monetary policy. Upon approval by parliament, Ueda will assume the top BOJ post on April 9 and chair his first policy-setting meeting on April 27-28.

TOKYO, Feb 2 (Reuters) - Japan's state-backed chip venture Rapidus will need about 7 trillion yen ($54 billion) of mostly taxpayer money to begin mass producing advanced logic chips in around 2027, its chairman, Tetsuro Higashi, told Reuters on Thursday. "In the past, the United States hindered Japan's chip industry growth. Japan and the United States worry that friction with China will result in semiconductor shortages that could threaten economic growth. Japan's most advanced semiconductor factory is a 40 nanometre plant owned by Renesas Electronics (6723.T). For them, the decision to invest will be taken when they are able assess our technology and production plans."

The increase, which was the fastest pace in four decades, will likely underpin market expectations the Bank of Japan (BOJ) may phase out its massive stimulus by tweaking its yield control policy. The rise in the Tokyo core consumer price index (CPI), which excludes fresh food but includes fuel, exceeded a median market forecast of 3.8% and a 3.6% gain seen in November, government data showed on Tuesday. The last time Tokyo inflation was faster was April 1982, when the core CPI was 4.2% higher than a year before. The rise in Tokyo CPI heightens the chance nationwide consumer inflation likely stayed above the BOJ's 2% target in December. But Japan's long-term interest rates have crept up since the BOJ stunned markets last month by widening the band around its 10-year bond yield target, a move investors saw as a prelude to a future rate hike.

☆ BOJ's Kuroda aims to keep policy loose to meet price, wage growth goals
▼ + stars: | 2023-01-04 | by ( Yoshifumi Takemoto | ) www.reuters.com time to read: +1 min

TOKYO, Jan 4 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Wednesday the central bank would maintain its loose monetary policy in order to sustain inflation at its 2% target along with wage growth. Kuroda's comments at a New Year gathering of the Japanese bankers' association counter lingering market speculation the BOJ may join the world's major central banks in tightening money supply to fight decade-high inflation. The world's third-largest economy would grow firmly and stably this year backed by accommodative monetary conditions although uncertainties such as inflation and the COVID-19 pandemic remain, Kuroda said. Adding to the uncertainty, the yen rebounded sharply on speculation the BOJ may start to turn away from its ultra-loose monetary policy after it widened the yield cap range on 10-year Japanese government bonds (JGBs) last month. Reporting by Yoshifumi Takemoto; Writing by Tetsushi Kajimoto; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

TOKYO, Dec 27 (Reuters) - The Bank of Japan (BOJ) has modified its stimulus measures to ease the transition away from an unconventional monetary policy when Governor Haruhiko Kuroda retires in April, former top currency diplomat Takehiko Nakao told Reuters in an interview. "The BOJ has not succeeded so much in raising inflation expectations and bringing down real interest rates while side-effects became larger. "The yen was too strong back then, but now the yen is clearly too weak," Nakao said, declining to specify preferred levels under current circumstances. Nakao said Japan's waning economic power and its excessively expansionist policy are weighing on the yen and making Japanese assets vulnerable to takeovers by overseas investors. "It is helpful that raising interest rates lead to some strengthening of the yen."

☆ 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.

☆ Analysis: Kuroda's abrupt policy tweak opens door for bigger shift next year
▼ + stars: | 2022-12-21 | by ( Leika Kihara | ) www.reuters.com time to read: +6 min

Waiting until next year would have forced the BOJ to combat intensifying market speculation of a near-term policy shift, or act when a deep U.S. recession could hit Japan's economy, they say. "When uncertainty is so high over the outlook for U.S. monetary policy, it probably wants to have a free hand on when next to act." POLITICS KEY TRIGGERThe abrupt timing of Tuesday's move also reflects growing political pressure for the BOJ to shift away from a policy narrowly focused on its 2% inflation target, the sources say. Hours before he met Kishida, Kuroda explained in parliament a framework on how the BOJ could exit ultra-easy policy in the future. Another dovish board member, Asahi Noguchi, also said earlier this month it "won't be surprising" for the BOJ to shift monetary policy.

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