Archives of “bank of japan” Tag

Japan – Reuters Tankan – manufacturers index hits 12 month high

From the Reuters Tankan: 

  • Japan manufacturers index hits one-year high of +17 in August vs +14 in July
  • Non-manufacturers index +27 in aug vs +24 in July
  • November manufacturers index seen at +19, non-manufacturers seen at +27
More from Reuters:
  • Poll of 516 big and mid-sized firms between August 3 and 17
  • 277 responded
  • Japanese business morale improved in August
  • Outlook is likely to remain steady
  • The Reuters Tankan closely tracks the Bank of Japan’s quarterly Tankan survey – could be a source of comfort for policymakers under pressure to deploy fresh stimulus to spur growth after Monday’s negative second-quarter growth data
  • Showed business managers were cautiously optimistic about pick-up in domestic demand, although a slowdown in China – Japan’s biggest trading partner – clouds the outlook

2 Major Events in this week

There are two events this week that will shape the investment climate potentially for the rest of the year.  The first is the Bank of England meeting. The following day is the US employment report.   

Both events take on added significance.  The Bank of England enters a new era.  The Monetary Policy Committee meets as usual, but shortly after it, the minutes will be published, and this will contain the vote itself.  There will no longer be a couple week delay. It will be interesting to see if other central banks, including the Federal Reserve and Bank of Japan adopt a similar approach over the medium term.  

It took the European Central Bank more than a decade to see the wisdom of providing some record.  It may be too much to expect it to make it nearly immediately available.  

Also, the BOE will release its Quarterly Inflation Report at roughly the same time.  This report has become an integral part of assessing the policy stance.    From giving little information at the time of the MPC meeting, the BOE is going to deluge the market with information.  It will dominate August 6 but on what should investors focus? 

Two considerations will ultimately generate the underlying signal for investors.  The first is the vote itself.  Many observers expect three MPC members to dissent:  Weale, McCafferty, and Miles.  If any more dissent, sterling’s reaction is likely to be more pronounced, and the impact on UK rates may be dramatic.  It would drive home what has been a tail-risk, namely a November rate hike.  On the other hand, this is Miles’ last meeting.  His vote might be dismissed by investors, as his successor, Gertjan Vlieghe, has wisely not shared his views.   

Read More  

IMF warns Japan to reload Abenomics

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  

BOJ Minutes – easing exerting intended effects, inflation improving

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

Bank of Japan meeting over – Announces NO CHANGE

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

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

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

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

Bank of Japan Minutes from April 30: Scepticism about hitting 2% target

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 

Bank of Japan announcement out now;No change in policy

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