The Bank of Japan (BOJ) yesterday unveiled fresh easing measures to spur the stuttering economy after its first policy meeting under new management, moves hailed by some analysts as game-changing.
The yen plunged on the news, sparking a huge swing in the Nikkei 225 stock index, with investors cheering the measures as Japan wrestles with a mixed bag of economic data and no clear sign of a firm recovery.
A moderate magnitude 5 quake struck east of Tokyo just as the bank announced its new measures, which were described by one analyst as a “huge regime change” steered by Japanese Prime Minister Shinzo Abe.
Abe had tapped Haruhiko Kuroda, former head of the Asian Development Bank, for the bank’s top job, as he publicly criticized previous BOJ management for being too timid in stoking Japan’s economy.
After wrapping up its two-day meeting, the central bank said it would embark on an aggressive spending program, while pledging to meet a 2 percent inflation target within two years, aimed at reversing years of falling prices.
Its purchases would include riskier assets such as exchange-traded funds (ETFs) and real-estate investment trusts, as well as longer-term government bonds, aimed at pushing down long-term interest rates to encourage companies and individuals to borrow.
ETFs are similar to an index fund, but trade on the market like stocks.
The bank also said it would aim to boost the monetary base — the amount of currency in circulation including commercial bank deposits in BOJ reserves — by ￥60 trillion (US$632 billion) to ￥70 trillion annually.
The moves would see the BOJ “enter a new phase of monetary easing both in terms of quantity and quality,” as it pointed to a pickup in the economy, which has been hurt by a poor trade picture overseas.
“Japan’s economy has stopped weakening and has shown some signs of picking up,” it said.
Tsuyoshi Ueno, economist at NLI Research Institute, described the moves as a “huge regime change in monetary policy.”
“What the BOJ announced today met almost all policy measures that had been speculated in the market,” Ueno added.
Yoshikiyo Shimamine, executive chief economist at Dai-ichi Life Research Institute, said the announcement “went beyond market expectations.”
“Kuroda showed today that the Bank of Japan is now different from what it was in the past,” he added.
The news out of Tokyo sent the US dollar surging against the yen, providing a boost to Japan’s exporters who have been struggling under the weight of a strong currency.
The greenback surged to ￥95.22 after the announcement, from ￥92.94 earlier in the day, while the euro also jumped to ￥122.18 from ￥119.39.
The weakening yen also sent the Nikkei up 2.2 percent by the close, reversing losses earlier yesterday, although the currency’s tumble may renew criticism from abroad that Tokyo was intentionally driving down the value of its currency to help exporters.
The benchmark Nikkei 225 gained 272.34 points to 12,634.54, while the TOPIX rose 2.7 percent, or 27.33 points, to 1,037.76.
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Taiwan’s property market is entering a freeze, with mortgage activity across the nation’s six largest cities plummeting in the first quarter, H&B Realty Co (住商不動產) said yesterday, citing mounting pressure on housing demand amid tighter lending rules and regulatory curbs. Mortgage applications in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung totaled 28,078 from January to March, a sharp 36.3 percent decline from 44,082 in the same period last year, the nation’s largest real-estate brokerage by franchise said, citing data from the Joint Credit Information Center (JCIC, 聯徵中心). “The simultaneous decline across all six cities reflects just how drastically the market
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
RSS