As peers in the US and Europe take a dovish turn, Bank of Japan (BOJ) Governor Haruhiko Kuroda yesterday signaled he is unfazed as yields in his own country get caught up in the global shift.
“There is no need to be extremely and strictly mindful about a concrete range for the rate” on Japan’s benchmark 10-year bond yield, Kuroda said.
The BOJ targets that rate to be about 20 basis points plus or minus zero.
His flexibility egged on buyers, with the yield pushing as low as minus-0.18 percent as he spoke during an afternoon news conference.
The market is likely to test just how flexible Kuroda is in the days and weeks ahead.
The BOJ kept its benchmark interest rate at minus-0.1 percent and 10-year yield target at about 0 percent earlier in the day.
Hours before that, the US Federal Reserve followed the European Central Bank in signaling a willingness to cut rates in the face of rising threats to global growth.
Economists surveyed by Bloomberg unanimously forecast no change at yesterday’s BOJ meeting, but for the first time in more than two years, a majority had predicted the BOJ’s next policy move would be to increase stimulus.
Some expect action as early as next month.
Many BOJ watchers say Fed rate cuts, seen as increasingly likely, could force the BOJ’s hand by pushing the yen to what it would consider an uncomfortably strong level.
A stronger yen would hamper the BOJ’s efforts to hit 2 percent inflation.
Core inflation, to be released today, is expected to have fallen last month to 0.7 percent and is forecast to drop further in coming months.
The US dollar yesterday fell to as low as 107.47 versus the yen in Tokyo, paring losses after Kuroda’s news conference.
Again, Kuroda expressed comfort with taking a wait-and-see approach, saying that in the end, a Fed cut might not have much of an effect if the markets have already priced it in.
“At any rate, monetary policy isn’t targeted at foreign exchange rates,” he said.
Still, Kuroda reiterated that the BOJ stands ready to add stimulus if momentum toward its 2 percent inflation goal is threatened.
However, it is unlikely to be that simple, as the BOJ also faces concerns about the accumulation of side effects from six-plus years of radical stimulus.
Many economists doubt the BOJ could even have much impact with whatever it chooses to do, because its toolbox is almost empty — complicating the risk-reward scenario.
Japan’s trade-dependent economy showed some resilience in the first three months of the year, but some economists are warning of a contraction this quarter.
The BOJ still expects conditions to improve in the second half of the year.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last