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☆ Morning Bid: Wings of a Dove
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +5 min

U.S. President Joe Biden is expected on Tuesday to name Fed Vice Chair Lael Brainard to a top White House economic policy position, replacing National Economic Council Director Brian Deese. Biden confidant Jared Bernstein is expected to replace Cecilia Rouse as chair of the Council of Economic Advisers. Brainard was seen as a powerful voice cautioning against over-aggressive Fed policy tightening. U.S. stock futures and world equities were higher on Tuesday, U.S. Treasury yields and the dollar were steady to lower. Euro zone economic growth slowed in the last three months of 2022 but avoided a contraction many had predicted for months.

☆ Bank of Japan’s new governor starts on back foot
▼ + stars: | 2023-02-14 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +3 min

HONG KONG, Feb 14 (Reuters Breakingviews) - Academic Kazuo Ueda faces a rocky time as the new governor of the Bank of Japan (8301.T). He is stepping down just as his signature yield curve control (YCC) policy is becoming increasingly unsustainable as domestic inflation rises. The Nikkei news service reported that officials had approached Deputy Governor Masayoshi Amamiya and were rebuffed. It seems likely Ueda will have to modify or abandon YCC given how much damage it is doing to the bond market and the BOJ’s balance sheet. Follow @petesweeneypro on TwitterloadingCONTEXT NEWSJapan's government on Feb. 14 named academic Kazuo Ueda as its pick to become the next governor of the country’s central bank.

☆ Dollar eases as inflation in focus, BOJ governor nomination awaited
▼ + stars: | 2023-02-14 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

The dollar index , which measures the U.S. currency against six major rivals, eased 0.019% to 103.17, having slipped 0.34% overnight. NEW BOJ GOVInvestors are also awaiting the formal nomination for the next Bank of Japan governor. Sources told Reuters that Japan's government was likely to appoint academic Kazuo Ueda as the next BOJ governor. Ueda, a former BOJ policy board member and an academic at Kyoritsu Women's University, is considered an expert on monetary policy but had not even been seen as a dark horse candidate for the top job. The Japanese yen strengthened 0.23% to 132.12 per dollar, having slipped 0.7% in the previous session.

[1/2] Kazuo Ueda, a former member of the BOJ's policy board, is seen at the headquarters of Bank of Japan in Tokyo, Japan May 25, 2022, in this photo taken by Kyodo. Ueda, a 71-year-old former Bank of Japan policy board member and an academic at Kyoritsu Women's University, will succeed incumbent Haruhiko Kuroda, whose second, five-year term ends on April 8. The governor and deputy governor nominees will testify at confirmation hearings to be held on Feb. 24 for the lower house, and Feb. 27 for the upper chamber. International markets have been closely watching Kishida's choice of next BOJ governor for clues on how soon the bank could phase out its yield curve control (YCC) policy. With markets creaking under the BOJ's heavy-handed intervention, many investors are betting the central bank will start hiking rates under Kuroda's successor.

With inflation accelerating, Ueda could finally set Japan on a path to raise rates after the BOJ spent a decade fighting deflation risks with its unorthodox bond buying scheme costing trillions of yen. Ueda himself on Friday said current policy settings were appropriate, which also put a bit of a dampener on expectations of any shift. Implied volatility has also eased in the forex options market, suggesting an ebbing in bets on big shifts in the yen exchange rate. "It's not very apparent that (Ueda) would take on the job and then immediately change the policy." To be sure, 10-year Japanese yields were untraded at the BOJ's ceiling on Monday, indicating plenty of investors are staying short.

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 next central bank chief may rue promotion
▼ + stars: | 2023-02-13 | by ( Pete Sweeney | Thomson Reuters | Asia Economics Editor Pete Sweeney Joined Reuters Breakingviews In Hong Kong In September Previously He Served As Reuters' Chief Correspondent For China Economy | ) www.reuters.com time to read: +7 min

In fact, it has spent an average of 1.3 trillion yen per trading day since the band widened: nearly 50 trillion yen in total, per Refinitiv data, and still counting. The central bank already owns over half of Japan’s sovereign bonds and is sure to suffer large losses when their prices fall, which they eventually must. The central bank chief must also work to put the country’s vast stack of inert money back to work. Kuroda effectively put the central bank at the service of former Prime Minister Shinzo Abe’s “Abenomics” stimulus programme. Fumio Kishida, the current leader, is having popularity problems and will want the central bank to support his aggressive agenda, which includes hiking defence spending, promoting innovative startups and redistributing wealth.

World markets this week will be dominated by U.S. inflation figures on Tuesday, leaving Monday free for investors in Asia to digest the previous session's action on Wall Street and adjust positioning ahead of the numbers. Indian consumer price inflation for January tops Monday's Asian economic calendar. Revised figures on Friday showed that inflation in December was a little stronger than originally reported, and a closely-watched consumer inflation expectations survey showed a notable spike in the short-term outlook. Tough talking on inflation from Fed officials was matched last week by their peers in Australia, India and Sweden, so the push is global. Sources have told Reuters that 71-year old academic Kazuo Ueda, a former Bank of Japan policy board member has been lined up to replace Haruhiko Kuroda as BOJ governor.

☆ Japan Expected to Name Kazuo Ueda, Backer of Zero Rates, as Central Bank Head
▼ + stars: | 2023-02-10 | by ( Peter Landers | Megumi Fujikawa | ) www.wsj.com time to read: 1 min

TOKYO—The expected nominee to lead the Bank of Japan , a longtime advocate of aggressive monetary policy, said Friday he wanted to continue the low-interest rate stance of the current governor. The government has decided to nominate Kazuo Ueda , a former University of Tokyo professor who served on the BOJ’s policy board from 1998 to 2005, as the next governor, said a person briefed on the appointment and public broadcaster NHK.

☆ Japan Set to Tap Kazuo Ueda, Backer of Zero Rates, as Central Bank Head
▼ + stars: | 2023-02-10 | by ( Peter Landers | Megumi Fujikawa | ) www.wsj.com time to read: 1 min

TOKYO—Japan is expected to name Kazuo Ueda , an advocate of aggressive monetary easing, to lead the Bank of Japan , and he said he wanted to continue the current governor’s low-interest-rate stance. The government decided to nominate Mr. Ueda, a former University of Tokyo professor who served on the BOJ’s policy board from 1998 to 2005, as the next governor, said a person briefed on the appointment and public broadcaster NHK.

☆ Factbox: Kazuo Ueda: Who is the new Bank of Japan governor and what can we expect from him?
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +4 min

TOKYO, Feb 10 (Reuters) - Japan's government is likely to appoint Kazuo Ueda, an academic and a former member of the Bank of Japan's policy board, as the next central bank governor, two government officials told Reuters on Friday. The 71-year-old is widely seen as an expert on monetary policy, but is seen as a surprise appointment by analysts. The following are some key questions and answers about the next central bank governor in the world's third-largest economy and the challenges he faces. He is an external director at JGC Holdings Corp (1963.T), an engineering company and at the state-owned Development Bank of Japan. In a 2016 article, Ueda wrote that the BOJ's ultra-easy policy seemed to be "reaching its limits".

The BOJ’s YCC faces a reckoningThe surprise news left investors and analysts trying to parse Ueda's recent commentary. "There is probably a lack of clarity on Ueda's policy leanings at the moment, but at least it is clear that Amamiya (who is seen as a dove) is out. That removes one of the headwinds for the yen," said Christopher Wong, currency strategist at OCBC in Singapore. "The knee-jerk reaction in yen appreciation is more of a reaction to Amamiya being out of the race." I think the new team means that they will redesign the BOJ's monetary policy, not maintain the current policy," said Takayuki Miyajima, a senior economist at Sony Financial Group in Tokyo.

☆ Take Five: The truth about inflation
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

That puts Tuesday's U.S. inflation data on the must-watch list. 1/ INFLATION BETSurprisingly strong January U.S. jobs data forced markets to rethink the view that interest rates will peak soon. Now, Tuesday's latest inflation figure is the next big test for where the Federal Reserve takes rates in coming months. Stock markets are confident that the Fed can bring down inflation without triggering a sharp growth slowdown. January's inflation report on Wednesday could show double-digit price rises, meaning no respite yet on the interest-rate front.

☆ Morning Bid: Volatility stirs
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

World markets end a rough week of confusing and competing narratives in distinctly edgy form, with peculiarly subdued volatility gauges flickering back to life. Both 10 and 30-year yields hit their highest levels in over a month early on Friday. Job shedding in the digital sector continued, with Yahoo's plans to lay off more than 20% of its total workforce. That said, the year-on-year oil price trend continues to be negative, as it's been all year and base effects from last year's price spike around the Ukraine invasion will only deepen that and weigh on headline inflation further. Goldman Sachs lowered its oil price forecasts for this year and next, cutting its Brent 2023 price forecast by $6 to $92 per barrel - still above current levels around $86.

☆ Japanese yen jumps on report Kazuo Ueda will be next governor of the central bank
▼ + stars: | 2023-02-10 | by ( Jenni Reid | ) www.cnbc.com time to read: +1 min

The Bank of Japan left its monetary policy unchanged on Wednesday. The Japanese yen pushed higher against both the euro and U.S. dollar on Friday after a Nikkei report said Kazuo Ueda would be appointed as the Bank of Japan's next governor. Economist Ueda is a former member of the central bank's policy board. Kuroda has overseen the BOJ's policy of ultra-low interest rates while other major central banks have been hiking to tackle inflation. However, Muto added, he may not be a "super hawkish type" – so any "normalization" would take place very slowly.

Tokyo, Feb 10 (Reuters) - Japan's government is likely to appoint Kazuo Ueda, an academic and a former member of the central bank's policy board, as the Bank of Japan's next governor, the Nikkei newspaper reported on Friday. The government will also nominate Ryozo Himino, former head of Japan's banking watchdog, and BOJ executive Shinichi Uchida as deputy governors, the Nikkei said. The government initially sounded out incumbent Deputy Governor Masayoshi Amamiya for the top BOJ job, but he declined, the Nikkei reported without citing sources. The yen strengthened from around 131.55 yen per dollar to around 130.60 after the Nikkei report. In an opinion piece that ran on the Nikkei in July last year, Ueda said warned the BOJ against prematurely raising interest rates just because inflation briefly exceeded 2%.

☆ Japan yields tumble to well below policy cap as BOJ stands pat
▼ + stars: | 2023-01-18 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

[1/2] A Japan Yen note is seen in this illustration photo taken June 1, 2017. The yield was at 0.51% prior to the Bank of Japan decision. "If they had expanded the band again or terminated YCC, yields would rise, which would be a de facto rate hike for a second consecutive meeting," said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities. The BOJ also made use of a newly announced policy tool immediately, offering five-year loans to financial institutions to enhance liquidity, and showing its resolve to keep yields low. At the post-meeting press conference, Kuroda defended the change, reiterating that widening the yield band has made YCC "fully sustainable".

☆ Japan yields tumble below policy cap after BOJ keeps status quo
▼ + stars: | 2023-01-18 | by ( Kevin Buckland | ) www.reuters.com time to read: +2 min

The 10-year yield was last down 10.5 basis points at 0.395%, which would mark the biggest one-day decline in seven years. It was at 0.51% prior to the BOJ decision. Ten-year JGB futures jumped when they resumed trading following the midday break, trading up as much as 1.81 points to 146.65, the highest since Dec. 20. "If they had expanded the band again or terminated YCC, yields would rise, which would be a de facto rate hike," said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities. The 10-year yield has repeatedly breached the BOJ's ceiling, only to close back at the 0.5% limit on each day.

☆ Japan yields stay above policy cap as BOJ sticks to status quo
▼ + stars: | 2023-01-18 | by ( Kevin Buckland | ) www.reuters.com time to read: +2 min

TOKYO, Jan 18 (Reuters) - Japanese government bond yields remained above the central bank's 0.5% policy ceiling on Wednesday, after the Bank of Japan unanimously decided to keep its yield curve controls in place. The benchmark yield was up 1 basis point at 0.51% as of 0250 GMT. In a relatively volatile session for cash bonds, the yield had started out flat and then eased as much as 1.5 basis points at one point to 0.485%. The 10-year yield has repeatedly breached the BOJ's ceiling, only to close back at the 0.5% limit on each day. Ten-year JGB futures were in the midday break at the time of the policy decision.

☆ Japanese Stocks Fall Ahead of BOJ Meeting
▼ + stars: | 2023-01-16 | by ( Dave Sebastian | Megumi Fujikawa | ) www.wsj.com time to read: 1 min

The Bank of Japan’s monetary-policy board is due to meet this week. Stocks in mainland China rose to start the week, while Japanese markets fell as the country’s long-term bond yields again breached a cap set by the Bank of Japan . The Nikkei 225 closed down 297.20 points, or 1.1%, to end the day at 25822.32. The Japanese yen weakened slightly against the U.S. dollar, hitting 128.69 by late afternoon trading in Hong Kong.

☆ Bank of Korea raises interest rates by 25 bps, as expected
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +1 min

SEOUL, Jan 13 (Reuters) - South Korea's central bank raised its policy interest rate by 25 basis points on Friday, making a widely expected move that many economists also predicted would mark the end of a tightening cycle that began in 2021. The Bank of Korea said its seven-member monetary policy board had decided to raise its policy interest rate (KROCRT=ECI) to 3.50%, the highest since December 2008. The rise matched a prediction by 36 out of 40 economists in a Reuters poll, in which the remaining four had expected the central bank to hold the rate steady at 3.25%. Friday's decision marked the 10th interest rate rise since the current tightening cycle began in August 2021 and brought the total amount of increase to 300 basis points. Reporting by Choonsik Yoo and Jihoon Lee; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.

Economists in a Reuters poll had predicted Friday's rate increase would mark the end of a rate-hike cycle that the Bank of Korea's began in late 2021. The Bank of Korea said its seven-member monetary policy board had decided to raise its policy interest rate (KROCRT=ECI) to 3.50%, the highest since late 2008. The interest-rate rise matched a prediction by 36 out of 40 economists in a Reuters poll, in which the remaining four had expected the central bank to hold the rate steady at 3.25%. The decision follows Governor Rhee Chang-yong's remarks this month that the central bank's policy stance would continue to focus on stabilising prices. Like its peers globally, the Bank of Korea is faced with growing pressure to adjust its policy stance as domestic consumer and corporate spending fades and global trade slows.

☆ BOJ Governor Kuroda's comments at news conference
▼ + stars: | 2022-12-20 | by ( Reuters Staff | ) www.reuters.com time to read: +4 min

FILE PHOTO: Bank of Japan Governor Haruhiko Kuroda attends a news conference in Tokyo, Japan, January 21, 2020. Following are excerpts from BOJ Governor Haruhiko Kuroda’s comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:REASON BEHIND THE BOJ’S DECISION“Overseas market volatility has heightened from around spring ... While we have kept the 10-year bond yield from exceeding the 0.25% cap, this has caused some distortions in the shape of the yield curve. It’s premature to debate specifics on changing the monetary policy framework or an exit from easy policy. “This change will enhance the sustainability of our monetary policy framework.

☆ Yen jumps 2.8% to 4-month peak after hawkish BOJ policy tweak
▼ + stars: | 2022-12-20 | by ( Kevin Buckland | ) www.reuters.com time to read: +1 min

[1/2] Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. The dollar tumbled as much as 2.78% to 133.11 yen , a level last seen on Aug. 16. The dollar had been slightly stronger versus the yen ahead of the policy announcement. Eyes will now be trained on BOJ Governor Haruhiko Kuroda's media briefing later in the day for additional hints about a pivot away from ultra-easy policy. Most BOJ watchers had expected no change in policy until his 10-year term ends at the end of March.

☆ Take Five: Keeping the lights on
▼ + stars: | 2022-12-16 | by ( ) www.reuters.com time to read: +5 min

1/PICKING A (JAPANESE) PIVOTEven the uber-dovish Bank of Japan has not been spared from investors trying to pick central bank pivot points. France is striving to avert power cuts, and Germany is bleeding cash to keep the lights on. Thursday has meetings scheduled for Indonesia - where the central bank has just seen growth added to its mandate - as well as Egypt, which is in line for support from the International Monetary Fund. Expectations of a softer dollar as the U.S. economy slows have sparked optimism about emerging markets, which should also benefit from China easing COVID-19 restrictions. Emerging markets interest ratesCompiled by Karin Strohecker, Graphics by Sumanta Sen and Vincent Flasseur, editing by Barbara LewisOur Standards: The Thomson Reuters Trust Principles.

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