Posts Tagged: bank of japan

IMF warns Japan to reload Abenomics

23 July 2015 - 18:49 pm
 

The International Monetary Fund has issued a stern warning to Japan that it needs to “reload” its Abenomics reforms or face the risk of slowing growth, stagflation and a new round of turmoil in financial markets.

In their latest annual assessment of Japan, IMF economists on Thursday said the world’s third largest economy was seeing a modest recovery and predicted it would grow at an annual rate of 0.8 per cent in 2015 and 1.2 per cent in 2016, **report Shawn Donnan in Washington and Kana Inagaki in Tokyo.

But they warned the economic recovery was fragile and facing substantial risks.

Chief among those, they said, was the stalling of structural reforms needed to lift the economy out of its current slow growth path at a time when Japan’s public debts were expected to hit 250 per cent of gross domestic product in the next five years.

The IMF economists also told the Bank of Japan to be ready to ease monetary policy further and do a better job of communicating its intentions to markets as inflation – which they forecast would hit 0.7 per cent this year – continued to rise more slowly than expected towards the central bank’s 2 per cent target. >> Read More

 

The Minutes from the Bank of Japan June 18/19 monetary policy board meeting out now

Quick headlines via Reuters:

  • Members agreed underlying trend in inflation, which was determined by the output gap and medium- to long-term inflation expectations, would continue to improve
  • A few members said effects of QQE might be diminishing, considering long-term interest rates had temporarily risen to the range of 0.5-0.6 percent
  • Some members noted effects of QQE continued to be substantial, given interest rates in Japan had been stable at low levels despite rise in overseas interest rates

Not much of surprise at all from these Minutes. Yen barely responding.

-

Here is the full text

 

The Bank of Japan meeting has concluded and the statement is out now

NO CHANGE in policy

–BOJ keeps monetary policy steady, pledges to increase monetary base at annual pace of 80 trln yen

  • Median real GDP forecast for fiscal 2015/16 at +1.7 pct vs +2.0 pct projected in April
  • Median real gdp forecast for fiscal 2016/17 at +1.5 pct vs +1.5 pct projected in April
  • Median real gdp forecast for fiscal 2017/18 at +0.2 pct vs +0.2 pct projected in April
  • BOJ’s policy decision was made by 8-1 vote
  • Board member Kiuchi votes against policy decision
  • Kiuchi proposed tapering annual jgb purchases to 45 trln yen, which was turned down by majority vote
  • Kiuchi proposed keeping asset buying, zero rates for as long as needed under flexible price target, which was turned down by 8-1

more to come -

BOJ Governor Kuroda will hold his usual press conference at 0630GMT:

  • He is likely to repeat that the BOJ won’t hesitate to ease policy further if data suggest growth and inflation are not meeting BOJ expectations

BOJ Q2 Tankan out now

01 July 2015 - 5:59 am
 

BOJ Q2 Tankan:

  • Tankan Large Manufacturing Index, 15 vs. expected 12, prior was 12 … today’s result is the first improvement for three quarters and the highest since March of 2014
  • Tankan Large Manufacturing Outlook, 16 vs expected 14, prior was 10
  • Tankan Large Non-Manufacturing  Index, 23 vs. expected 22, prior was 19 … third consecutive quarter of improvement (also highest since March of 2014)
  • Tankan Large Non-Manufacturing  Outlook, 21 vs. expected 23, prior was 17
  • Large All-Industry Capex for Q2, 9.3% vs. expected 5.3%, prior was -1.2%
  • Tankan Small Manufacturing Index, 0 vs. expected 1, prior was 1 
  • Tankan Small Manufacturing Outlook, 0 vs. expected 1, prior was 0
  • Tankan Small Non-Manufacturing Index, 4 vs. expected 5, prior was 3
  • Tankan Small Non-Manufacturing Outlook, 1 vs. expected 3, prior was -1

>> Read More

Nikkei closes up 0.92% at 20174.24

19 June 2015 - 11:57 am
 

Japan stock market close 19 June 2015

  • +183 points

Still nothing from the BOJ but maybe they’ve been waiting for the close, or haven’t finished all the donuts yet

BOJ announcement: NO CHANGE

19 June 2015 - 8:40 am
 

Announcement from the Bank of Japan monetary policy meeting 

  • Keeps monetary policy steady, pledges to increase monetary base at annual pace of 80 trln yen
  • BOJ’s policy decision was made by 8-1 vote
  • BOJ board member Kiuchi votes against policy decision
  • Kiuchi proposed tapering annual jgb purchases to 45 trln yen, which was turned down by majority vote
  • Kiuchi proposed keeping asset buying, zero rates for as long as needed under flexible price target, which was turned down by 8-1
  • BOJ says will cut number of policy-setting meetings from next year
  • Number of policy-setting meetings each year will be cut to 8 times from current 14
  • BOJ says Japan’s economy continues to recover moderately, keeps assessment unchanged
  • BOJ says to issue outlook report on economy, prices 4 times annually from next year, vs 2 times now
  • Will release document containing summary of opinions presented at each policy meeting about a week after each meeting
  • Will continue to issue Minutes of its policy meetings as it does now

 

Next up from the Bank of Japan, Governor Kuroda press conference at 0630GMT

 

Minutes from the April 30 Bank of Japan meeting:

  • Some expressed view that private consumption lacked momentum
  • Members agreed that private consumption is likely to remain resilient due to improving incomes
  • One member said industrial production in April-June could be more or less flat due to inventory adjustments

Full text is here

More (via Reuters):

  • Members agreed that Japan can exceed its potential growth rate from fy 2015 through fy 2016
  • Most members said in fy 2017 growth could slow to a level below potential growth rate due to sales tax hike
  • A few members said cpi would not reach 2 pct during forecast period which covers fy 2017
  • Members agreed that mid- to long-term inflation expectations are rising on the whole
  • Many members said risks to prices are skewed to downside due to uncertainty about inflation expectations
  • Members agreed that cpi falling to zero might affect inflation expectations
  • Members agreed that cpi falling to zero might affect inflation expectations 
 

No change in policy from the Bank of Japan

  • Revises up assessment for exports
  • Revises up assessment of factory output
  • Consumer inflation likely to slow for time being reflecting oil price falls
  • Core consumer inflation, when excluding effect of last year’s sales tax hike, moving around 0.5 pct
  • Private consumption has remained resilient but recovery in some areas has been sluggish
  • Japan’s economy likely to continue recovering moderately as a trend
  • Keeps monetary policy steady, pledges to increase monetary base at annual pace of 80 trln yen
  • Policy decision was made by 8-1 vote
  • BOJ board member Kiuchi votes against keeping policy steady, says policy before October 31 easing was appropriate
  • Kiuchi proposed making 2 pct inflation target a medium- to long-term goal, which was turned down by 8-1 vote
 

Minutes from the Bank of Japan December 18/19 meeting … looks like pretty stadard stuff from the:

  •  Japan economy has continued to recover moderately
  • BOJ to keep easing until 2% inflation stable

Full text

–Developments have rendered these Minutes perhaps a little redundant

–More (via Reuters):

  • Members shared recognition global markets had shown some nervousness
  • Some members said while oil price falls had positive effect on global economy, it could risk destabilising markets
  • Some members said political turmoil in Greece might have adverse effects on euro-area economy
  • Some members said oil price falls would support economic activity through rises in corporate profits, households’ real income
  • One member said there might be growing tendency among firms to postpone capex plans
  • Some members said various surveys showed business sentiment had turned cautious
  • Many members said relatively weak developments had been recently observed in consumer sentiment surveys
  • Many members said oil price falls were likely to exert downward pressure on CPI for time being
  • Many members said oil price falls would have positive effect on economy, push up prices long-term
 

Over the weekend, we asked rhetorically whether “The BoJ is The Next SNB?” after one BOJ official was overheard warning that “we have caused tremendous trouble for the financial industry,” and many others growing anxious about continuing its massive purchases of government bonds and pressure from the financial industry is strengthening by the day “to scale back monetary easing soon.” Overnight, it was none other than Goldman who reiterated precisely what we said, however when looking at the BOJ from the “other” angle - that of the central bank not doing enough to convince markets it will do everything in its power, i.e., print, until inflation is a “stable” 2%.

Here is Goldman’s Naohiko Baba with why the BOJ at risk of losing credibility over its price commitment” 

The Bank of Japan (BOJ) kept its monetary policy unchanged, as we expected, at the Monetary Policy Meeting on January 20-21. Two noteworthy points from Governor Kuroda’s subsequent press conference were as follows:

 

1. The BOJ released its interim assessment of the October Outlook Report at the MPM, and sharply lowered its core CPI outlook – for FY2014 to +0.9% from +1.2%, and for FY2015 to +1.0% from +1.7% – reflecting the recent slide in crude oil prices. However, the BOJ maintains its view that its 2% price stability target is likely to be achieved by around FY2015.

 

2. The MPM did not discuss lowering the 10 bp interest rate on excess bank reserves, despite heightened expectations among foreign investors in particular ahead of the meeting.

 

>> Read More

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Team ASR,
Baroda, India.