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☆ Asia shares near 4-month peak, yen falls as BOJ maintains policy
▼ + stars: | 2023-06-16 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

The BOJ rounded up a central bank heavy week, keeping its pledge to "patiently" sustain massive stimulus to ensure Japan sustainably achieves its 2% inflation target accompanied by wage hikes. As widely expected, the BOJ maintained its -0.1% short-term interest rate target and a 0% cap on the 10-year bond yield set under its yield curve control (YCC) policy. Markets are now pricing in 67% chance of the U.S. central bank raising its interest rate by 25 basis points next month, according to CME FedWatch tool. The European Central Bank on Thursday left the door open to more rate hikes as it flagged risks from rising wages and revised up its inflation projections. The ECB also raised interest rates by 25 bps taking its policy rate to 3.5%, a level not seen since 2001.

Persons: DAX, Kazuo Ueda's, Charu, HSI, Ryan Brandham, Lagarde, Brent, Ankur Banerjee, Kim Coghill Organizations: Federal, Bank of Japan, Ueda, Saxo Markets, Nikkei, Nasdaq, Validus Risk Management, European Central Bank, ECB, NatWest Markets, China . U.S . West Texas, Thomson Locations: SINGAPORE, Asia, Pacific, Japan, North America, U.S, China . U.S

☆ Yen sags to 15-year low vs euro after BOJ rate decision
▼ + stars: | 2023-06-16 | by ( ) www.cnbc.com time to read: +2 min

Yen, euro and U.S. dollar banknotes of various denominations. The yen plunged to a 15-year low against the euro on Friday after the Bank of Japan (BOJ) kept its ultra-low interest rate policy and forecast that inflation will slow later this year, in contrast with the European Central Bank's (ECB) rate hike on Thursday. As widely expected, the BOJ maintained its -0.1% short-term rate target and a 0% cap on the 10-year bond yield set under its yield curve control (YCC) policy. The yen fell broadly following the decision and hit a fresh 15-year low of 155.22 per euro . The euro was flat against the greenback at $1.0940 after earlier touching a five-week high, having surged over 1% on Thursday following the rate hike and forward ECB guidance.

Persons: Kazuo Ueda, Erik Bregar, Christine Lagarde Organizations: U.S, Bank of Japan, European, Bank's, Bank of, Bull, Bank of England Locations: Bank of Japan, Toronto

☆ Yen slips after BOJ stands pat, soft data dents dollar
▼ + stars: | 2023-06-16 | by ( Rae Wee | ) www.reuters.com time to read: +4 min

As widely expected, the BOJ maintained its -0.1% short-term interest rate target and a 0% cap on the 10-year bond yield set under its yield curve control (YCC) policy. The U.S. dollar was last roughly 0.1% higher at 140.42 yen . That and a run of soft U.S. economic data saw the dollar fall broadly as traders scaled back their bets on how high U.S. interest rates would need to rise. FED HAWKISHNESS CHALLENGEDThe ECB's monetary policy decision came a day after the U.S. Federal Reserve left interest rates unchanged, snapping a string of 10 consecutive rate hikes. Production at U.S. factories almost stalled in May as manufacturing struggled under the weight of higher interest rates, while U.S. import prices similarly fell last month.

Persons: Kazuo Ueda's, Hirofumi Suzuki, Christine Lagarde, Sterling, Rae Wee, Edwina Gibbs, Kim Coghill Organizations: Bank of Japan, U.S, European Central Bank, ECB, Deutsche Bank, Bank of England, U.S . Federal Reserve, Fed, Labor Department, Thomson Locations: SINGAPORE, Asia, United States

☆ FACTBOX BOJ's next steps and triggers for policy shift
▼ + stars: | 2023-06-15 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

While Ueda has stressed the BOJ will be in no rush to dial back stimulus, the central bank is dropping clues on possible triggers of a policy shift. ABANDON OR TWEAK YIELD TARGETIn ending YCC, the first step will be to abandon or modify the 10-year yield target. One idea would be to widen the band around the yield target, now set at 50 basis points on either side. TWEAKING FORWARD GUIDANCEBefore tweaking the yield cap, the BOJ could drop more hints of a policy shift such as by modifying forward guidance. Big upward revisions to its inflation forecasts at a July quarterly review would signal the BOJ's conviction that conditions for a policy shift are falling into place.

Persons: Kazuo Ueda's, Ueda, YCC, Leika Kihara, Sam Holmes Organizations: Bank of Japan, Thomson Locations: TOKYO, Japan

☆ Japan will stop yen decline beyond USD/JPY 145, most economists say: Reuters poll
▼ + stars: | 2023-06-15 | by ( Satoshi Sugiyama | ) www.reuters.com time to read: +4 min

TOKYO, June 15 (Reuters) - Japan's government and central bank will act to stop the yen's decline if it depreciates to the 145 per U.S. dollar level, more than half of economists polled by Reuters said. Fifteen of 28 economists (54%) said the government and the BOJ will take steps such as issuing a warning or intervening into the currency market once the yen weakens beyond 145 per greenback, the June 8-13 poll found. In a separate question on the weak yen's impact on BOJ policy, nine economists (31%) said the central bank's decisions could be swayed by a yen depreciation beyond 145 per dollar. In the poll, all but one - JP Morgan - out of 28 economists corroborated the view, citing an improved bond market functionality and Governor Kazuo Ueda's accommodative remarks so far. BOJ's Ueda has said an end to easy policy would depend on the economy achieving 2% inflation coupled with pay growth.

Persons: Harumi Taguchi, Morgan, Kazuo Ueda's accommodative, Hiroshi Watanabe, BOJ's Ueda, Satoshi Sugiyama, Kantaro Komiya, Veronica Khongwir, Anant Chandak, Christian Schmollinger Organizations: Reuters, Bank of Japan, P, Financial Services Agency, Sony Financial Group, Thomson Locations: TOKYO

☆ BOJ to keep ultra-low rates, focus on Ueda's inflation views
▼ + stars: | 2023-06-15 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

The central bank is also likely to keep intact a pledge to "patiently" sustain massive stimulus to ensure Japan sustainably achieves its 2% inflation target accompanied by wage hikes. The BOJ review comes after the Federal Reserve's decision on Wednesday to pause interest rate hikes as it closely watches the lagged economic impact of past monetary tightening. But he also said the BOJ will "act swiftly" if its inflation projections prove wrong, and pointed to signs that corporate price-setting behaviour was starting to change. With companies offering the largest pay hikes in three decades, the BOJ is also dropping hints that Japan's prolonged era of wage stagnation may be ending. In an academic paper issued in May, the BOJ said inflation and wage growth could accelerate abruptly once costs exceed a certain threshold - and that once wages begin to rise, the trend could persist.

Persons: Kazuo Ueda, Ueda, Leika Kihara, Sam Holmes Organizations: Bank of Japan, Federal, Reuters, Thomson Locations: BOJ, TOKYO, Japan

June 16 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The Bank of Japan, the most dovish major central bank in the world, announces its latest policy decision on Friday, with markets highly sensitive to signs of when and to what degree it will ditch its super-loose policy. The BOJ follows surprisingly aggressive interest rate increases and guidance recently from policymakers in Canada and Australia, and this week's hawkish signals from the European Central Bank and, to a lesser extent, the U.S. Federal Reserve. The BOJ remains the outlier among major central banks, promising to maintain its loose policy until it is sure inflation meets the 2% target. If Japanese assets are any indication, investors expect Ueda and his colleagues to err on the dovish side.

Persons: Jamie McGeever, Kazuo Ueda's, Ueda, Fed's Bullard, Waller, Barkin Organizations: The Bank of Japan, Nasdaq, European Central Bank, U.S . Federal Reserve, Bank of America, ECB, Nikkei, Thomson, Reuters Locations: Canada, Australia, Japan

That yen hoard has mostly been held as cash with the aim of ploughing into Japanese bonds when yields eventually turn higher. "We're all waiting for the end of YCC so we can buy JGBs," said a Japanese pension fund manager who requested anonymity as he is not authorized to speak to media. Japanese banks have ploughed money into overseas bonds, but insurance firms and pension funds have kept their powder dry. MARKETS WONT BLINKSuch is the positioning and inertia among long term Japanese investors that analysts expect markets to barely blink even if the BOJ plays for time this week. Lifers and pension funds say they have very little exposure to Japanese government bonds, so a surprise policy change won't hurt them either.

Persons: Androniki, Haruhiko Kuroda, Kazuo Ueda, Bart Wakabayashi, Hirofumi Suzuki, Suzuki, Kevin Buckland, Ankur Banerjee, Vidya Ranganathan Organizations: REUTERS, Bank of, Japan, Nippon Life Insurance, Sumitomo Life Insurance, Insurance, State, Thomson Locations: Japan, Tokyo, TOKYO, SINGAPORE, YCC, Singapore

☆ Factbox: BOJ's next steps and triggers for policy shift
▼ + stars: | 2023-06-13 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

Persons: Kazuo Ueda's, Ueda, YCC, Leika Kihara, Sam Holmes Organizations: Bank of Japan, Thomson Locations: TOKYO, Japan

☆ Dollar dips ahead of US inflation data, central bank meetings
▼ + stars: | 2023-06-13 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Those expectations kept risk sentiment buoyant, pinning the U.S. dollar near multi-week lows against the risk-sensitive Australia and New Zealand dollars. The euro gained 0.04% to $1.0760, with traders also focused on Thursday's interest rate decision from the European Central Bank, following its policy meeting. The U.S. dollar index edged marginally higher to 103.59, after falling to 103.24 on Monday, its lowest since May 23. "The central bank will likely continue to send a dovish message or one of no intention of policy change until it changes direction." In Asia, China's central bank cut its seven-day reverse repo rate by 10 basis points to 1.90% from 2.00% on Tuesday, sending the yuan falling in the offshore market .

Persons: Joseph Capurso, Jane Foley, Chong, Rae Wee, Edmund Klamann Organizations: Federal Reserve, U.S, Labor Department's CPI, Commonwealth Bank of Australia, Bank of England, European Central Bank, ECB, Rabobank, Bank of Japan, Standard Chartered Bank Korea, Thomson Locations: SINGAPORE, Australia, New Zealand, Korea, Japan, Asia

☆ Dollar dips ahead of U.S. inflation data, central bank meetings
▼ + stars: | 2023-06-13 | by ( ) www.cnbc.com time to read: +3 min

Persons: Joseph Capurso, Jane Foley, Chong Organizations: Federal Reserve, U.S, Labor Department's CPI, Commonwealth Bank of Australia, Bank of England, European Central Bank, ECB, Rabobank, Bank of Japan, Standard Chartered Bank Korea Locations: Australia, New Zealand, Korea, Japan, Asia

Monetary policy meetings of the Fed, the European Central Bank (ECB) and the Bank of Japan (BOJ) will set the tone for the week as markets seek clues from policymakers on the future path of interest rates. U.S. May inflation data is also out on Tuesday as the Fed kicks off its two-day meeting. "We are pretty much with consensus, expecting the Fed to stay put this week and a 25 basis point hike from the ECB," Nordea's Christensen said. The U.S. dollar index clocked a loss of nearly 0.5% last week, its worst weekly drop since mid-April, and was last down 0.1% at 103.43. The euro rose 0.2% to $1.0768, having risen 0.4% last week, its first weekly gain in roughly a month.

Persons: Niels Christensen, Nordea's Christensen, " Christensen, Goldman Sachs, Samuel Indyk, Rae Wee, Simon Cameron, Moore, Angus MacSwan Organizations: Federal Reserve, European Central Bank, Bank of Japan, Fed, ECB, Reuters, U.S, Reserve Bank of New, People's Bank of, Thomson Locations: Reserve Bank of New Zealand, Australia, People's Bank of China

☆ Dollar steady, with Fed pause eyed in busy c.bank week
▼ + stars: | 2023-06-12 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Policy meetings of the Fed, the European Central Bank (ECB) and the Bank of Japan (BOJ) will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates. The U.S. dollar index clocked a loss of nearly 0.5% last week, its worst weekly drop since mid-April, and was last marginally higher at 103.58. The euro slipped 0.02% to $1.0744 in early Asia trade, after having risen 0.4% last week, its first weekly gain in roughly a month. "Central banks have raised rates aggressively over the past 12-15 months and given the lagged effects with which monetary policy affects demand, are central banks teeing up for a pause, following the RBNZ's example?" "We change our BOJ call to no YCC revision at this week's meeting," said Societe Generale's Jin Kenzaki, referring to the central bank's controversial yield curve control policy.

Persons: Alvin Tan, Jin Kenzaki, Rae Wee, Muralikumar Organizations: European Central Bank, Bank of Japan, Asia FX, RBC Capital Markets, Money, U.S, Reuters, ECB, ANZ, Reserve Bank of New, Thomson Locations: SINGAPORE, Asia, Australia, Reserve Bank of New Zealand

☆ Dollar steady, with Fed pause eyed in busy central bank week
▼ + stars: | 2023-06-12 | by ( ) www.cnbc.com time to read: +3 min

Policy meetings of the Fed, the European Central Bank and the Bank of Japan will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates. The U.S. dollar index clocked a loss of nearly 0.5% last week, its worst weekly drop since mid-April, and was last marginally higher at 103.58. "Outside of the decisions that the central banks make at this meeting, what will be of particular interest is their forward guidance," economists at ANZ wrote in a note. "Central banks have raised rates aggressively over the past 12-15 months and given the lagged effects with which monetary policy affects demand, are central banks teeing up for a pause, following the RBNZ's example?" "We change our BOJ call to no YCC revision at this week's meeting," said Societe Generale's Jin Kenzaki, referring to the central bank's controversial yield curve control policy.

Persons: Alvin Tan, Jin Kenzaki Organizations: European Central Bank, Bank of Japan, Asia FX, RBC Capital Markets, Money, U.S, Reuters, ECB, ANZ, Reserve Bank of New Locations: Asia, Australia, Reserve Bank of New Zealand

☆ Bank of Japan set to keep ultra-low rates, may signal inflation overshoot
▼ + stars: | 2023-06-11 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

[1/2] Visitors are seen at the headquarters of Bank of Japan in Tokyo, Japan, January 17, 2023. Ueda told parliament on Friday that corporate price-setting behaviour was showing changes that could work to push up inflation more than expected. While the BOJ will not produce fresh inflation forecasts next week, it may signal that inflation is overshooting initial projections - possibly at Ueda's post-meeting briefing, the sources said. "The BOJ must be vigilant to both the risk of an inflation overshoot, and the risk of a deep overseas slump hitting Japan's economy." With droves of companies continuing to hike prices, the BOJ is widely expected to upgrade its inflation forecasts at its next quarterly review in July, analysts say.

Persons: Issei Kato, BOJ, Ueda, Kazuo Ueda, Leika Kihara, Takahiko Wada, Kim Coghill Organizations: Bank of Japan, REUTERS, Thomson Locations: Tokyo, Japan, TOKYO

☆ BOJ set to keep ultra-low rates, may signal inflation overshoot
▼ + stars: | 2023-06-09 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

Persons: Issei Kato, BOJ, Ueda, Kazuo Ueda, Leika Kihara, Takahiko Wada, Kim Coghill Organizations: Bank of Japan, REUTERS, Thomson Locations: Tokyo, Japan, TOKYO

☆ Analysis: Trauma of Japan's deflation battle keeps BOJ wary of policy shift
▼ + stars: | 2023-06-08 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

Having taken part in Japan's battle with deflation as BOJ board member from 1998 to 2005, Ueda knows all too well the danger of a premature exit from ultra-loose policy. Wary of a wobbly recovery, he opposed the BOJ's decision in 2000 to raise short-term rates to 0.25% from zero. On the surface, conditions for phasing out a portion of the BOJ's massive stimulus appear to be falling in shape. To be sure, Ueda has left scope to tweak YCC in case inflation continues to overshoot the BOJ's forecasts. In a group interview last month, Ueda said the BOJ could tweak YCC "if the balance between the benefit and cost of our policy shifts."

Persons: Ueda, Kazuo Ueda, Haruhiko Kuroda, Leika Kihara, Sam Holmes Organizations: REUTERS, Bank of Japan, Companies, Thomson Locations: Japan, Tokyo, TOKYO, U.S, China

☆ IMF urges BOJ to keep ultra-low rates, but be ready to shift course
▼ + stars: | 2023-06-01 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

It won't happen overnight" as the public must be convinced Japan won't fall back to deflation, Gourinchas said, adding it was "too early" for the BOJ to tighten policy. While it was appropriate to keep interest rates ultra-low, the BOJ must keep in mind the experience of other central banks that are still struggling to tame high inflation. So, there is a need to be vigilant and to be ready to tighten monetary policy if inflation remains too elevated." He also said it would be "very difficult" to tighten monetary policy while maintaining YCC, due to the challenge of determining the appropriate level for two rate targets. And then, if the need arises to tighten monetary policy, it can do so as part of the usual tightening of the policy rate," he said.

Persons: Pierre, Olivier Gourinchas, Gourinchas, Kazuo Ueda, Leika Kihara, Sam Holmes Organizations: Bank of Japan, Monetary Fund's, Reuters, Thomson Locations: Japan, TOKYO

☆ BOJ's Ueda vows to maintain easy policy, rules out chance of early exit
▼ + stars: | 2023-05-19 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

The recent rise in Japanese inflation above the BOJ's 2% target is driven mostly by cost-push factors rather than strong domestic demand, Ueda said, adding that responding to such price increases with tighter monetary policy would hurt the economy. "The cost of prematurely shifting policy, and nipping the bud towards achieving 2% inflation, is extremely large," Ueda said. "It's appropriate to take time judging (when to) tweak ultra-easy policy toward a future exit." The remarks came in the wake of data showing Japan's core consumer inflation hit 3.4% in April, staying well above the BOJ's 2% target, on rising food and services prices. Instead of focusing only on the side effects, the BOJ must carefully weigh the balance between the benefits and costs of its measures in determining policy, Ueda said.

☆ Dollar buoyed by hawkish Fed expectations as debt deal eyed
▼ + stars: | 2023-05-19 | by ( Rae Wee | ) www.reuters.com time to read: +4 min

SINGAPORE, May 19 (Reuters) - The dollar firmed near a six-month peak against the yen on Friday on the back of rising U.S. Treasury yields, as optimism over debt ceiling talks in Washington raised expectations of higher-for-longer interest rates. The news helped calm fears of an unprecedented and economically catastrophic American debt default, leading markets to revise their expectations of where U.S. interest rates could go. The dollar stayed elevated in early Asia trade on Friday and last bought 138.40 yen , having risen to a near six-month high of 138.75 yen in the previous session. U.S. Treasury yields have climbed on the back of the hawkish Fed repricing and amid a pick up in risk sentiment. The two-year Treasury yield , which typically moves in step with interest rate expectations, last stood at 4.2581%, edging away from a low of 3.964% at the start of the week.

☆ 'Foreign investors are back': Japan stocks surge to their highest since 1990
▼ + stars: | 2023-05-17 | by ( Jihye Lee | ) www.cnbc.com time to read: +4 min

The firm noted that foreign investors bought a net 2.1 trillion yen ($15.4 billion) worth of Japanese stocks in April – adding that Japan's corporate sector remains the largest net buyer of Japanese stocks, with a volume of 1.1 trillion yen year-to-date. Central bank focusSociete Generale strategists added that their overweight position on Japanese equities remains unchanged. The Japanese yen traded at slightly weaker levels to 136.43 against the greenback on Wednesday. "Keep an overweight position on Japan equities, unhedged, and biased to banks, financials, and value," they wrote. "Specifically, we note the solid fundamentals compared with stocks on overseas markets, and we also think that expectations for structural changes/reforms could push Japanese equities up even further," wrote Japan equity strategist Kazunori Tatebe.

☆ BOJ's Ueda says yield control will end when price goal achievement foreseen
▼ + stars: | 2023-05-09 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

"We're seeing some positive signs in trend inflation, including inflation expectations," the BOJ chief said. Under yield curve control (YCC), the BOJ sets a short-term interest rate target of -0.1% and caps the 10-year bond yield around zero as part of efforts to durably hit its price goal. It also announced a plan to review its past monetary policy moves, laying the groundwork to gradually phase out his predecessor's massive stimulus programme. Ueda said the review will scrutinise the benefits and side effects of past monetary policy, including by conducting workshops with private academics. "We will take necessary policy steps at each of our rate reviews, with an eye on financial and price developments, even while we conduct the review," Ueda said.

☆ US dollar gains as inflation data backs Fed rate hike; yen sinks
▼ + stars: | 2023-04-28 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +3 min

The dollar index, a measure of the greenback's value against six major currencies, rose 0.1% to 101.54 . Friday's data showed the personal consumption expenditures (PCE) price index edged 0.1% higher in March after rising 0.3% in February. In the 12 months through March, the PCE price index increased 4.2% after climbing 5.1% in February. The so-called core PCE price index gained 4.6% on a year-on-year basis in March after rising 4.7% in February. Following the inflation data, the rate futures market has priced in a 90% chance of a 25 basis-point hike next week.

☆ 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.

ORLANDO, Florida, April 28 (Reuters) - With the U.S. debt ceiling crisis set to reach boiling point between June and August, it already promises to be a long hot summer for financial markets. - and inflation is high, while history shows the U.S. Congress certainly has the ability to push debt ceiling negotiations to the brink. "Markets are fundamentally intolerant of tightening liquidity conditions, and you could see this confluence of tightening liquidity where the debt ceiling and YCC come together," said Alex Lennard, investment director at Ruffer LLP. Default fears could suck more money out of bills and into safer parts of the money market universe like the Fed's RRP, exacerbating broader market liquidity conditions. Related columns:- 'Peak Fed' aggravates U.S. debt ceiling strains- Inequality and 'deposit glut' sowed bank instabilityBy Jamie McGeever; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

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