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Bank to extend forward guidance

We expect the Bank of Japan to extend its forward guidance from spring 2020 to summer 2020 or later at next week’s meeting. However, we think that the financial markets are misguided in anticipating cuts to short-term interest rates as the Bank remains concerned about financial stability risks.
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Japan Economics Weekly

Respite for BoJ doesn’t weaken case for a policy tweak

Pressure on the Bank of Japan’s Yield Curve Control framework eased this week. On the campaign trail for the Upper House election, where inflation has emerged as a key concern, Prime Minister Kishida said that monetary tightening would do more harm than good. Even more welcome for the BoJ, pressure emanating from the bond market has dropped back too. It had to buy less than a tenth as many JGBs this week as last. Some might feel that this reduces the need to shore up the policy framework. But a respite provides a window in which to make it more resilient.
Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

24 June 2022

Japan Data Response

Japan Consumer Prices (May 2022)

While inflation didn’t rise any further in May, it will remain above the BoJ’s 2% target until early-2023, while underlying inflation will approach 2%. However, the Bank won’t respond with tighter policy. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

24 June 2022

Japan Data Response

Japan Flash PMIs (Jun. 2022)

The PMIs suggest that supply shortages are still holding back manufacturing output and adding to price pressures. On a more upbeat note, the surveys also point to a strong pick-up in consumption as the economy rebounds from the Omicron wave and international tourists return. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

23 June 2022

More from admin

Dollar remains overvalued despite recent decline

Place holder text follows: we don’t think that we are in the late stages of a bubble in “risky” assets generally. Provided vaccines enable the gradual relaxation of coronavirus restrictions around the world, we continue to forecast that the prices of most risky assets will rise further. Place holder text follows: While risky assets have rallied a long way from…

7 June 2021

Egypt’s gas sector to provide a boost to the recovery

Egypt’s natural gas sector struggled last year as the slump in regional energy prices caused production and exports to fall. But the re-opening of key LNG infrastructure in recent months and prospects for rising exports into Europe will help to improve the current account position and boost the economic recovery.Historically, Egypt had been a net exporter of natural gas, but…

20 May 2021

FX Markets Chart Book

We think that the rally in equity markets will continue

We think there is scope for global equities to make more headway over the next couple of years, against the backdrop of a recovering global economy and supportive monetary and fiscal policy. November saw the biggest monthly increases in MSCI’s World Index of developed market (DM) equities since early 1976, in both local currency (~11.8%) and US dollar (~12.7%) terms.…

29 April 2021
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