Kozo Yamamoto … no reasoning cited. But we’ll see. Maybe he foresees an economic slump in the wake of the sales tx hike due April 1 and more BOJ easing? At least he’s given himself a 10 yen range to play around in
Posts Tagged: bank of japan
- Keeps monetary policy steady by unanimous vote
- Keep increasing monetary base rate at 60-70 trln yen
- keeps economic assessment unchanged
- Says economy continues to recover moderately
- Voted 8 – 1 against Kuichi proposal to make 2% inflation goal a medium- to long-term goal
- BOJ cuts their view on exports, saying they have recently leveled off
- Says pick up in capital spending has become increasingly evident
- Says industrial output has been increasing at a somewhat accelerated pace
This week brings a slew of central bank meetings: At the forefront will be the BOJ meeting on Tuesday where no changes to monetary policy are expected. However, we will be watching the commentary closely for hints to further monetary easing in the coming months. Goldman, and others, still expect the BOJ to provide additional stimulus in the second quarter of this year as the impact of the consumption tax hike on the economy becomes visible – it is that expectation that sent the USDJPY above 100 in late 2013 and any disappointment by the BOJ will certainly have an adverse impact on the all important Yen carry pair.
In terms of the key data to watch this week, the themes of recent weeks remain the same: US activity data, with retail sales and the U. Michigan Consumer sentiment survey the main releases, European inflation trends (French and German HCPI data on Thursday and Friday, respectively), and finally external balances in EM. Within that group, the latest data points for trade and current account balances in India, Turkey and South Africa will receive the most attention.
Monday, March 10
- Japan Current Account Balance (Jan): Consensus -¥1411.8B, previous -¥638.6B
- Japan Economy Watcher Survey (Feb): Consensus 54.1, previous 54.7
- Israel MPC minutes
- Canada Housing Starts (Feb): Consensus 190k saar, previous 180.1k
- Also interesting: France/Italy/Turkey IP, Israel GDP, Norway CPI
Tuesday, March 11
- Japan BOJ meeting: We and consensus expect no change to current policy measures.
- US Wholesale Trade (Jan): Consensus +0.5%, previous +0.3%
- Italy GDP (Q4, Final): Consensus +0.1% qoq, previous +0.1%
- Israel Current Account Balance (4Q): Previous US$363mn
- Also Interesting: UK/Brazil IP, Ukraine GDP, Hungary Consumer Prices >> Read More
The Bank of Japan is nearing the end of its strategy to avoid additional credit easing at an early date without throwing financial markets into confusion.
The BOJ adopted the strategy after the turn of the year, amid growing expectations among overseas investors that it would promptly implement additional easing, such as before the consumption tax increase in April.
The central bank put the brakes on such expectations in a statement issued after its policy board meeting in January. At the following meetings on Monday and Tuesday, the BOJ adopted a “quasi-easing” measure by deciding to expand its special loan support fund program so that it could save additional easing.
Though an increase in market players forecasting further easing in July is a favorable development for the BOJ, uncertainties remain.
At a press conference Tuesday after the two-day board meeting, BOJ Gov. Haruhiko Kuroda said anew that the sales tax increase will have only limited adverse effects on economic activity. Kuroda thus held expectations of early additional easing in check, as he did in January.
As the latest decision to double the scale of the loan support program and extend it for one year from its scheduled expiry at the end of March is expected to favorably affect financial institutions, stock prices rose considerably, led by purchases of bank stocks. The preservation of additional easing measures has proved successful for now. >> Read More
- open 14514.47
- high 14900.24
- low 14469.49
- USDJPY 102.64
A slight fade into the close after a robust session following the the BOJ policy meeting
101% More Details to our Subscribers at TOKYO !
The surprise in the Bank of Japan’s policy update today was the extent to which it will attempt to stimulate the economy with special lending facilities.
The BoJ said it will “double the scale” of two loan schemes that were set to expire. The facilities enable financial institutions to borrow funds at a fixed rate of just 0.1 per cent for four years.
Details below, but here’s the key quote on the intended impact:
The Bank expects that these enhancements will further promote financial institutions’ actions as well as stimulate firms’ and households’ demand for credit, with a view to encouraging banks’ lending and strengthening the foundations for economic growth.
The success of the loan schemes has been underwhelming so far. Even with real interest rates in negative territory because of the rise in inflation, demand for credit among companies and households is not responding as the BoJ had hoped.
But the significance might not be the details, but merely that the BoJ has just proven it’s willing to amend its policy to help the economy. >> Read More
Today’s BOJ’s Kuroda speech- : Offering too complicated forward guidance may be disruptive for markets07 December 2013 - 13:56 pm
Bank of Japan (BOJ) Governor Kuroda is speaking today: “Public Policy Study and Monetary Policy Management” . His speech is at the Graduate School of Public Policy, the University of Tokyo.
- QE has been producing anticipated results, the economy is following path of meeting the BOJ’s price target
- BOJ will continue QE for as long as needed to achieve price target in stable manner
- Any exit from prolonged monetary easing could be challenging, be it conventional of unconventional policy
- Offering too complicated forward guidance may be less efficient, sometimes even disruptive, for markets
- The chance of the eurozone going into deflation is ‘quite low’
His full speech is here (PDF)
It looks as though analysts have misjudged just how ready the Bank of Japan is to introduce further monetary easing.
In recent weeks numerous pundits have predicted the BoJ would introduce further easing measures in early 2014 as the Japanese economy shows signs of stagnating and rising inflation – a key goal of the central bank – appears to wane.
But board member Takehiro Sato told business Leaders in Hakodate today that further easing would be “counterproductive”.
True, the BoJ’s last policy statement says the bank stands ready to adjust policy if risks to Japan’s economy materialise. But Mr Sato implies the threshold for further action is far higher than just some disappointing economic data:
My understanding is that the downside risks described here refer to tail risks, including significant turbulence in global financial markets that would be comparable to the Lehman shock and the European sovereign debt crisis, and do not concern such trivial matters as a small divergence of the outlook for economic activity and prices from the baseline scenario.
He also said the aggressive monetary policy introduced last April included “all possible measures” available at the time and now is the time to monitor the effects, not introduce new policy.
In short, the BoJ has done everything it can. If Japan needs further reform, it’s up to Prime Minister Shinzo Abe to introduce structural and fiscal reforms.
- BOJ keeps monetary policy unchanged – to increase monetary base at 60-70tln yen p.a.
- Unanimous vote
- No change to the QE program, no extra purchases of ETFs or J-REITS
- overnight rate remains at 0.1%
- See Yellen keeping accommodative stance to spur recovery
- Yellen ‘most appropriate person to run the Fed
- Wants BOJ to act if stronger yen threatens Japan’s economic recovery