The Bank of Japan (BOJ) left its ultra-easy monetary policy unchanged in its last meeting before Governor Haruhiko Kuroda steps down and is replaced by economics professor Kazuo Ueda.
While most analysts expected the Japanese central bank to stay the course in Kuroda’s final policy decision, some had speculated about a surprise tweak.
The bank left its long-standing negative interest rate in place and made no further adjustments to the band, in which rates for 10-year government bonds fluctuate.
Photo: AFP
The decision came shortly after Japan’s parliament approved Ueda as the BOJ’s next governor, paving the way for the 71-year-old to take over next month.
In recent months, the BOJ has steadfastly resisted tightening, even other developed economies have hiked rates to tackle inflation — a policy gap that has caused the yen to tumble against the US dollar.
Kuroda has insisted that the bank’s long-standing goal of sustained 2 percent inflation — considered necessary to turbocharge the world’s third-largest economy — has not yet been achieved.
Consumer prices hit 4.2 percent in January, driven by factors including higher fuel costs, but Kuroda has argued the rises are the result of temporary factors like the war in Ukraine.
He wants to see evidence of more sustained rises, including salary increases, before adjusting policy.
Ueda told lawmakers last month that he saw the “continuation of monetary easing as appropriate,” warning of uncertainty in financial markets and the global economy.
Current factors driving higher prices “will likely ebb in the future, and inflation in consumer prices will likely drop below 2 percent,” he said.
Ueda has a doctorate in economics from the Massachusetts Institute of Technology and is seen as a good communicator who prefers cautious reflection over abrupt action.
Kuroda, 78, is to step down at the end of his second term on April 8, after a tenure defined by his signature “bazooka” easy-money policies.
Since he took charge, the central bank’s assets have quadrupled, surpassing GDP, in a first for a G7 nation.
Analysts said Ueda would face a tough job in navigating a way forward for the BOJ, whose easy-money policies are viewed as unsustainable in the long term.
“While a policy change may not come any time soon, Japanese companies have already been preparing for an eventual shift, as shown by the high level of net cash they hold,” SuMi TRUST senior economist Hiroyuki Ueno said.
Santa Zvaigzne-Sproge, head of investment advice at Conotoxia, said inflation fueled by the strong dollar and supply chain problems linked to the COVID-19 pandemic and the Ukraine war would make sudden rate hikes a risky prospect for the bank.
“The BOJ has no control over the appreciation of the US dollar and supply shortages, as these are external factors,” she said.
“This means that raising interest rates at this time would not only have any noticeable effect on inflation, but would also put additional pressure on Japanese companies,” she said.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
SinoPac Financial Holdings Co (永豐金控) is weighing whether to add a life insurance business to its portfolio, but would tread cautiously after completing three acquisitions in quick succession, president Stanley Chu (朱士廷) said yesterday. “We are carefully considering whether life insurance should play a role in SinoPac’s business map,” Chu told reporters ahead of an earnings conference. “Our priority is to ensure the success of the deals we have already made, even though we are tracking some possible targets.” Local media have reported that Mercuries Life Insurance Co (三商美邦人壽), which is seeking buyers amid financial strains, has invited three financial
CAUTION: Right now, artificial intelligence runs on faith, not productivity and eventually, the risk of a bubble will emerge,’ TIER economist Gordon Sun said Taiwanese manufacturers turned more optimistic last month, ending a five-month streak of declining sentiment as concerns over US tariffs, currency volatility and China’s overcapacity began to ease, the Taiwan Institute of Economic Research (TIER) said yesterday. The manufacturing business confidence index rose 1.17 points from June to 86.8, its first rebound since February. TIER economist Gordon Sun (孫明德) attributed the uptick to fading trade uncertainties, a steadier New Taiwan dollar and reduced competitive pressure from Chinese producers. Taiwan’s semiconductor industry is unlikely to face significant damage from Washington’s ongoing probe into semiconductors, given the US’ reliance on Taiwanese chips to power artificial