19 September 2013 - 19:29 pm
Fitch Ratings says in its newly published Global Economic Outlook (GEO) that world economic growth will strengthen in H213 and 2014, driven by a cyclical pick up in major advanced economies (MAE), while growth stutters in emerging markets (EM). Its latest forecasts for world GDP growth are revised down to 2.3% in 2013 (from 2.4% in the June GEO), 2.9% in 2014% (from 3.1%) and 3.2% in 2015 (unchanged), weighted at market exchange rates.
“Forward guidance of major central banks reinforces Fitch’s view that the short-term policy rates of the US Fed, ECB, Bank of England and BoJ will remain low into 2015,” says Gergely Kiss, Director in Fitch’s Sovereign team. “However, the marked rise in long-term yields and risk premiums on some asset classes since May 2013 indicates that the exit from exceptionally loose monetary conditions is likely to generate bouts of volatility, despite enhanced central bank communication and an improving economic outlook. In particular, tighter global funding conditions will add to headwinds facing EMs, particularly those dependent on capital inflows,” he adds. >> Read More
10 September 2013 - 6:06 am
- Many members said they hope the government steadily promotes fiscal reform
- Credibility of fiscal management must be restored to keep intrest rates stable
- Many members said BOJ’s huge buying is keeping yields low even as economy recovers
- One member said bond yields may rise and erode the effect of BOJ easing if the government efforts on fiscal reform weaken
- Many said price rises being observed across large range of itmes
- A few projected Japan CPI to rise through summer then pause thereafter
Link to full text of the minutes:
Minutes of the
Monetary Policy Meeting
on August 7 and 8, 2013
September is upon us and the Federal Reserve’s decision to curtail its asset purchase programme may be informed by new data this week.
Here is what to watch:
The last reading of the US unemployment rate arrives this week before Federal Reserve officials decide if they should dial back stimulus measures.
Economists forecast 180,000 positions were created in August, a faster pace than in July. The unemployment rate is expected to remain unchanged at 7.4 per cent, while the average work week lengthens to 34.5 hours.
Leaders of the Group of 20 will meet on Thursday and Friday in Saint Petersburg, Russia, to discuss global monetary policy, the conflict in Syria and tax-evasion goals.
President Barack Obama is set to attend the summit, but the White House has not confirmed if he will hold an individual meeting with Russian President Vladimir Putin.
Economic data: >> Read More
29 August 2013 - 10:06 am
The global economy could be hurt if the withdrawal of funds from emerging markets picks up ahead of an expected reduction in the U.S. Federal Reserve’s monetary stimulus, a Bank of Japan board member said on Thursday.
Yoshihisa Morimoto also signalled that Japan’s government needed to proceed with a planned two-stage hike in the sales tax as part of efforts to fix its tattered finances, or face a severe market backlash.
The former utility executive stuck to the BOJ’s assessment that Japan’s economy was headed for a moderate recovery, but noted headwinds such as geo-political risks in the Middle East and market volatility caused by expectations the Fed could start tapering its bond-buying programme as soon as next month.
“Market participants are withdrawing funds from emerging and resource-rich nations on expectations (of Fed’s tapering) and may continue to do so,” Morimoto said in a speech to business leaders in Morioka, northeastern Japan.
“The global economic recovery remains fragile, so there’s huge uncertainty on how a sharp outflow of funds could affect financial markets and global growth,” he said, in the starkest warning to date by a BOJ official on the potential risk for a bigger capital withdrawal from emerging economies.
The Indian rupee and Turkish lira have both hit record lows against the dollar, the Indonesian rupiah has fallen to four-year lows, and other currencies have fallen sharply as investor sentiment has soured on emerging markets. >> Read More
14 August 2013 - 12:09 pm
Japanese government bonds fell Wednesday, sliding off a multi-month high marked a day before as brighter signs in the global economic outlook cooled demand.
Taking their lead from the U.S. Treasury market overnight, long-term JGB prices declined, with the benchmark 10-year yield up 0.2 basis point at 0.750% as of 0600 GMT. Yields on JGBs with different maturities also increased broadly. On Tuesday, the 10-year yield dropped to a three-month low of 0.730% after the strong result of a five-year JGB auction emboldened investors.
Lead JGB futures for September ended down 0.20 at 143.94 on Wednesday.
“What happened Tuesday put upward pressure on bond yields,” said Teruyoshi Sotome, a senior bond strategist at Mizuho Securities, referring to strong data on German economic sentiment and U.S. consumer spending. >> Read More
- BOJ members said CPI is likely to turn positive
- Expect Japan economy to recover moderately
- A few members continued to hold cautious views on prices
- A few BOJ members said CPI rise might come to a pause after summer
- Easing functioning to support companies, households
Here is the link to the full PDF:
Minutes of the Monetary Policy Meeting
on July 10 and 11, 2013
Bank of Japan Gov. Haruhiko Kuroda said Monday he sees the monetary stimulus that the central bank introduced April as having positive effects on financial markets, the economy, and expectations for price rises, but cautioned that the BOJ is still some ways off from achieving its 2% inflation goal.
“Not all of these favorable developments are attributable to (the April easing), nevertheless it most certainly is an important factor,” Mr. Kuroda said in a news conference.
In April, the BOJ’s took unprecedented easing measures, which have helped the core consumer price index increase for the first time in 14 months. Data released by the government Friday showed the index logged a 0.4% rise on year in June. >> Read More
- Sees core CPI in fiscal 2015/16 at 1.9% vs April forecast also at 1.9%
- retains plan for 60 to 70 T yen monetary base annual pace
- Will continue easing until stable price growth is reached
- Japan’s economy starting to recover moderately
- Revises up assessments on Capex and output
- Says Capex has stopped weakening and is showing some signs of picking up
- Output is increasing moderately
- Annual; CPI growth is likely to turn positive
- Board member Kuichi proposed making the 2% target a medium to long term goal, was voted down 8-1
- Says uncertainty for Japan economy is still high, BOJ will make adjustments as needed
-So, the BOJ has left policy as is and will continue to keep very accommodative policy
-Here is the link to the BOJ statement: Statement on Monetary Policy, July 11, 2013