All posts tagged: BOJ

Japan’s yen jumps vs dollar amid specter of BOJ intervention

Japan’s yen jumps vs dollar amid specter of BOJ intervention

Published by Sam

NEW YORK/TOKYO : The yen jumped against the dollar late on Wednesday, with traders on high alert for signs of intervention by Japanese monetary authorities to boost a currency languishing near 34-year lows. The dollar fell sharply to 153 yen from about 157.55 yen for reasons that were not immediately clear, after the U.S. stock market closed and the Federal Reserve’s monetary policy meeting ended hours earlier. The dollar was last at 154.85 yen. The yen had rallied on Monday, with money market data suggesting Japan’s finance ministry had spent around $35 billion to prop up the currency that day. Official intervention data for the period will be announced at the end of May. Traders have been on watch for weeks for possible intervention by Japanese officials, as even a historic exit from negative rates has failed to lift the currency. When contacted by Reuters, Japan’s vice finance minister for international affairs, Masato Kanda, who oversees currency policy, said he had nothing to say about whether Japan had intervened in the market. Two days ago, …

BOJ Governor Ueda’s comments at news conference

BOJ Governor Ueda’s comments at news conference

Published by skeptic

The Bank of Japan kept interest rates around zero on Friday and highlighted a growing conviction that inflation was on track to durably hit 2 per cent in coming years, signalling its readiness to hike borrowing costs later this year. The central bank also stuck to its guidance made in March to keep buying government bonds around the current pace, dashing hopes by some traders that it could soon taper purchases partly to slow the yen’s declines. Following are excerpts from BOJ Governor Kazuo Ueda’s comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters: FUTURE MONETARY POLICY GUIDANCE “As for our future monetary policy guidance, it will depend on economic and price developments at the time. We will scrutinise the economy, prices and their risks, and set short-term rates at each policy meeting.” “If underlying inflation moves in line with our forecasts, we could adjust the degree of monetary easing. If the economy and prices overshoot, that could also be a reason to change policy.” ON IMPACT OF WEAK …

BOJ will hike rates if trend inflation accelerates, Gov Ueda says

BOJ will hike rates if trend inflation accelerates, Gov Ueda says

Published by Sam

TOKYO :Bank of Japan Governor Kazuo Ueda said on Tuesday the central bank will raise interest rates again if trend inflation accelerates toward its 2 per cent target, in line with its forecast. “If our price forecasts change, that would also be a reason to change monetary policy. But we don’t have any preset idea on the specific timing and pace” of rate hikes, Ueda told parliament. He also said the BOJ must maintain ultra-loose monetary policy for the time being as trend inflation, or price rises driven by domestic demand and measured by scrutinising various indicators, remains “somewhat below 2 per cent”. Ueda’s remarks comes ahead of the BOJ’s two-day policy meeting that ends on Friday, when the board is set to keep interest rates unchanged and announce fresh quarterly growth and inflation forecasts. The BOJ is likely to project inflation will stay around its 2 per cent target for the next three years, sources have told Reuters, which would cement expectations the central bank will raise interest rates again this year from current …

Foreigners big buyers of Japanese bonds ahead of BOJ decision

Foreigners big buyers of Japanese bonds ahead of BOJ decision

Published by skeptic

Foreign investors continued to accumulate Japanese bonds for the third straight week ahead of a pivotal move by the Bank of Japan (BOJ) to exit negative interest rates after 17 years. They pumped in a massive 2.16 trillion yen ($14.26 billion) into long-term Japanese bonds on a net basis last week, the biggest amount in a week since mid-March 2023, data from the Ministry of Finance showed. Japanese short-term debt securities, meanwhile, witnessed about 1.16 trillion yen of foreign outflows, the first weekly net outgo in three weeks. In a widely expected decision, the BOJ ditched its negative rate policy on Tuesday with its first interest rate hike in 17 years and ushered in a new era of monetary policy. The 10-year JGB yield has, meanwhile, shed about 4.3 basis points so far this week amid the BOJs’ bond buying as part of its money market operations and its unscheduled 3 trillion yen worth of bond repurchases. Simultaneously, foreign investors offloaded approximately 674.22 billion yen in Japanese stocks last week — the largest weekly divestment …

Yen Tumbles After The First BOJ Rate Hike In 17 Years; It Won’t Last

Yen Tumbles After The First BOJ Rate Hike In 17 Years; It Won’t Last

Published by skeptic

It was one small step for the Bank of Japan, but a giant leap for the yen — albeit in the wrong direction, at least against the dollar. What gives? There are several explanations for why the yen moved sharply… in the wrong direction after a historic BOJ move meant to signal tightening in order to bring prices lower, contain runaway inflation and, generally, boost the yen. Let’s start with the fundamental one: according to Bloomberg’s Ven Ram, the real currency reaction will have to wait for Wednesday. As the Bloomberg commentator notes, in line with news reports overnight, Governor Kazuo Ueda exited negative rates in a historic decision, but also scrapped yield curve control and ended its purchases of exchange-traded funds. The domestic markets, though, seem unenthused: nominal Japanese government bond yields fell alongside the currency, and even stocks couldn’t muster the excuse of a weaker currency to climb higher. What gives? The yen’s broad exchange rate is actually higher this month, though no one is getting excited. As trading interest goes in the currency …

BOJ to end negative rate policy next week, says Nikkei

BOJ to end negative rate policy next week, says Nikkei

Published by Sam

TOKYO : The Bank of Japan is expected to end its negative interest rate policy on Tuesday on substantial wage hikes by big firms in this year’s wage negotiations, the Nikkei newspaper reported on Saturday. The BOJ began coordinating both within and outside the bank Friday on ending its negative interest rate policy, the economic daily said. Japan’s biggest companies agreed to raise wages by 5.28 per cent for 2024, the heftiest pay hikes in 33 years, the country’s largest union group said on Friday. This year’s wage hikes “are of a level that even reflationists who are cautious about modifying monetary policy would accept a change in policy,” the Nikkei cited one BOJ source as saying. BOJ officials, including Governor Kazuo Ueda, have recently stressed the timing of a shift away from negative rates would depend on the outcome of this year’s annual wage negotiations between workers and employers. Sources have told Reuters the BOJ will debate ending its negative rates next week if Friday’s preliminary survey on big firms’ wage talks outcome yield strong …

Japan’s business lobby head sees near-term chance of BOJ policy shift

Japan’s business lobby head sees near-term chance of BOJ policy shift

Published by skeptic

TOKYO :The head of Japan’s leading business lobby said on Monday the central bank was highly likely to normalise its ultra-loose monetary policy in the near future amid heightening momentum for wage hikes. “There is greater momentum for wage hikes at this year’s spring wage negotiations compared with last year,” Masakazu Tokura, chairman of business lobby Keidanren, told a news conference, adding that he was hopeful that pay increases will spread not just among big firms but their smaller counterparts. He also said he saw a greater chance that Japan will achieve the central bank’s 2 per cent inflation target. “There’s a high chance the BOJ will shift toward policy normalisation in the not so distant future,” Tokura said, adding that he was not sure whether such a move would come in March. Source link

USDJPY Plunges As Soaring Japanese Wage Growth Sparks Surge in BoJ Rate-Hike Odds

USDJPY Plunges As Soaring Japanese Wage Growth Sparks Surge in BoJ Rate-Hike Odds

Published by skeptic

There was notable weakness in Japanese stocks overnight after Japanese wage growth accelerated to the fastest clip since June. While the basic wage trend unchanged, overall wage growth was lifted by the special wage: According to monthly wage data released by the Ministry of Health, Labour and Welfare (MHLW), nominal cash wage growth accelerated to +2.0% yoy in January, from +0.8% in December. Growth on a reference “same sample” basis (unaffected by changes in the survey sample) was +2.0%, with growth remaining at the same level since November last year. The special wage rose sharply by +16.2% yoy and lifted overall wage growth by +0.6 pp. The special wage tends to fluctuate sharply and is particularly susceptible to sample bias. Growth in the special wage on a reference “same sample” basis rose only +5.9%. Source: Goldman Sachs The picture is not a pretty one for the average Jo-san as ‘real’ wages continue to sink… Source: Goldman Sachs …which has prompted labor unions to make the strongest pay demands in three decades. Rengo, Japan’s largest labor union federation, …

BOJ board member Nakagawa signals conviction over price goal achievement

BOJ board member Nakagawa signals conviction over price goal achievement

Published by skeptic

MATSUE, Japan : Bank of Japan (BOJ) board member Junko Nakagawa said the economy was making steady progress towards achieving the central bank’s 2 per cent inflation target, signalling her conviction that conditions for phasing out its massive stimulus were falling into place. Faced with intensifying labour shortages, companies appear to have resumed their practice of increasing pay annually, and will likely offer wage increases exceeding those of last year, Nakagawa said. “We can say that prospects for the economy to achieve a positive cycle of (rising) inflation and wages are in sight,” Nakagawa said in a speech. “There are clear signs of change in how companies set wages. Japan is moving steadily towards sustainably and stably achieving our 2 per cent inflation target,” she said. The remarks are likely to reinforce dominant market expectations the BOJ will exit negative interest rates this month or in April. Source link

BOJ chief Ueda keeps upbeat view on inflation, wage outlook

BOJ chief Ueda keeps upbeat view on inflation, wage outlook

Published by skeptic

TOKYO : Bank of Japan Governor Kazuo Ueda said the country’s inflation was accelerating as a trend as a tight labour market pushes up wages, reiterating the bank’s conviction that conditions for ending negative interest rates were falling into place. Speaking in parliament, Ueda said Japan’s economy is likely to experience a positive cycle, in which higher job and wage growth leads to moderate rises in inflation. “Service prices continue to rise moderately,” he said on Thursday. “Trend inflation is also gradually accelerating. We will guide monetary policy appropriately in line with such moves.” Ueda declined to comment on the yen’s recent levels, saying only that currency moves are influenced by various factors. “It’s important for currency rates to move stably reflecting fundamentals,” he said. Sources have told Reuters the BOJ is on track to end negative interest rates in coming months despite Japan’s economy slipping into a recession, on growing signs that companies will continue to offer bumper pay amid a tightening job market. A Reuters poll showed more than 80 per cent of …