Posts Tagged: boj

 

Reuters Tankan report:

  • Japan manufacturers index +18 in March (unchanged from February, up 1 point from 3 months ago)
  • Japan non-manufacturers index at +31 in March, up 1 point from February, up 6 points from December
  • Japan manufacturers June index seen at +12, non-manufacturers seen at +14
  • There is a Bank of Japan Tankan Survey, and a Reuters Tankan Survey.
  • Both are surveys of manufacturing and service companies designed to assess business conditions in Japan.
  • The BOJ Tankan is conducted quarterly, the Reuters Tankan is monthly.
  • Confidence at Japanese manufacturers held steady in March but is seen weakening over the next three months >> Read More
 

O-M-GKozo 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

 

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

BOJ Redirects Attention From QE To Loans

18 February 2014 - 11:31 am
 

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

 

If you needed another reason to buy stocks, trust in the growth meme, and have your faith in Abenomics confirmed… look away. Japanese Machine orders for December just printed -15.7% in December – the biggest MoM plunge since 1992. This is the biggest miss to expectations since 2006 and what is considerably more problematic for Abe et al. is that YoY expectations of a core machine order rise of 17.4% was hopelessly missed with a small 6.7% gain (and this is data that excludes more volatile orders).

 As Bloomberg notes, core machine orders are an indicator of future capital expenditure and it seems, just as in the US, that thanks to “stocks” now being considered central bank policy tools that capex no longer means productive capital use… it means buybacks, dividends, and shareholder recaps in any which way we can. How was the weather in Japan in December?

 

 But while collapsing machine orders are “completely irrelevant”, even if a plunge of this magnitude usually portends a recession, what should be far more troubling to the Kool aid addicts is if the BOJ were to announce that just like the Fed, it too is tapering its Open-ended QE ambitions. Considering this is precisely what BOJ board member Kiuchi just did, that relentless USDJPY meltup overnight may not be such a slamdunk.

From Market News…  >> Read More

 

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

 
  • 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:

Jobs day:

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.

G-20 Summit:

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

Positives & Negatives of this Week

31 August 2013 - 8:43 am
 

Positives:

1. U.S. Q2 GDP growth was revised to a 2.5% (from 1.7% annualized rate).
2. Initial jobless claims fell 6k to 331k this week; 4 week average at lowest level since November ’07;
3.  Consumer Confidence rose to 81.5 v expectations of 79 — just below the best since January ’08
4. Q2 personal consumption came in at 1.8% v expectations of 1.7% (but down from 2.3% in Q1).
5. Case-Shiller home prices rose 12% year over year.
6. Richmond fed manufacturing index unexpectedly surges to 14 v expectations of 0. Dallas and Chicago manufacturing indices also improve in August (Milwaukee though falls below 50).
7. Despite the rise in mortgage rates — or perhaps because of them? –  purchase applications rise 2.4% to 3 week high;
8. Japan continues to make progress in their Abenomics experiment. BoJ sees CPI ex food rise 0.7%  (higher than expected)
9. Despite the EU recession, German, French and Italian business confidence in August all rise more than expected.
10. The Savings rate holds steady at 4.4%.

Negatives: >> Read More

 

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

Reader Discretion & Risk Disclaimer

Our site is objectively in letter and spirit, based on pure Technical Analysis. All other content(s), viz., International News, Indian Business News, Investment Psychology, Cartoons, Caricatures, etc are all to give additional ambiance and make the reader more enlightening. As the markets are super dynamic by very nature, you are assumed to be exercising discretion and constraint as per your emotional, financial and other resources. This blog will never ever create rumors or have any intention for bad propaganda. We report rumors and hear-say but never create the same. This is for your information and assessment. For more information please read our Risk Disclaimer and Terms of Use.

Technically Yours,
Team ASR,
Baroda, India.