Bank of Japan will continue with its bold quantitative easing policy and looks to double its monetary base over the next two years.
Charles Riley reports from CNNMoney that Japan’s central bank pledged Wednesday to maintain its ambitious quantitative easing program, saying that economic conditions in the country are improving.
“Japan’s economy has started picking up,” the Bank of Japan said in a statement, citing improvement in exports, consumer spending and private investment.
The central bank announced in April that it would expand its balance sheet by purchasing longer-term debt and securities like ETFs. The bank also merged its asset-purchase programs and suspended a rule that prohibited the purchase of longer-term debt.
Posted by Admin on May 22, 2013
Japan’s new optimism rests on Abenomics
Martin Fackler from NY Times reports that after years of grinding malaise, Japan suddenly has some of its bling back.
A humbled Sony — once a titan of Japan Inc. — recently sprang back into the black for the first year in five years, courtesy of a plunging yen. Honda, another corporate icon, triumphantly announced a return to Formula One racing, rejoining an exclusive club of high-performance carmakers after having slinked away when cash ran low.
Even some of Japan’s wary consumers are beginning to indulge. At the plush Takashimaya department store in Tokyo’s financial district, a clerk reported that $20,000 watches had become hot sellers. And a cut-rate sushi chain, which flourished in difficult times, just started a line of upscale restaurants for customers newly able to afford “petite extravagances.”
The reason for the exuberance? Early — and some say deceptive — signs that new Prime Minister Shinzo Abe’s economic shock therapy, called Abenomics, might just be working.
Posted by Admin on May 21, 2013
According to The Wall Street Journal’s Mari Iwata, Tokyo—A top Japanese economic policy maker warned that a further sharp drop in the yen could harm the country’s economy, tempering the full-throated yen-weakening rhetoric of the new government that has successfully pushed the Japanese currency down more than 10% against the dollar in less than two months.
“The yen has come to a good level,” Economy Minister Akira Amari said in an interview Monday on Japan‘s TBS television station, the latest in a series of comments from cabinet members suggesting that officials are happy with an exchange rate of about ¥90 to the dollar—but not much weaker.
“If it falls further to the three-digit level, it would boost import prices, weighing on the everyday life of the nation,” Mr. Amari said, implying that officials may try to step on the brakes if markets seem to be pushing the dollar to the ¥100 level—a mark unseen since 2009.
The dollar traded in the 89-yen range in Asia markets Monday, flirting with the 90-yen level for the first time since June 2010. That is considerably stronger for the dollar—and weaker for the yen—than the 79-yen range it hit in mid-November.
The yen started weakening two months ago when general elections were called and polls forecast a victory for then-opposition leader Shinzo Abe. He based his campaign on calls for aggressive economic stimulus, and a weakening of the yen. Mr. Abe’s Liberal Democratic Party won a landslide victory in the mid-December ballot, and he and his aides have since pushed aggressively for policies seen as weakening the yen, from bigger government spending to more monetary easing from the Bank of Japan.
Posted by cbasdeo09 on January 28, 2013
Reuters/Carlos BarriaAccording to Blooberg’s news, China’s economic growth accelerated for the first time in two years as government efforts to revive demand drove a rebound in industrial output, retail sales and the housing market. Gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 7.8 percent median estimate in a Bloomberg News survey and 7.4 percent in the previous period. Industrial output in December rose a more-than- expected 10.3 percent and fixed-asset investment for the year gained 20.6 percent.
China’s economic growth accelerated for the first time in two years as government efforts to revive demand drove a rebound in industrial output, retail sales and the housing market.
Gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 7.8 percent median estimate in a Bloomberg News survey and 7.4 percent in the previous period. Industrial output in December rose a more-than- expected 10.3 percent and fixed-asset investment for the year gained 20.6 percent.
The recovery adds to evidence that the global economy is improving, after U.S. data yesterday showed housing starts at a four-year high, European bond yields receded from crisis levels and Japan announced a $116 billion stimulus. To sustain growth, China’s incoming premier, Li Keqiang, may need to confront the fading effects of government support, a likely pickup in inflation and rising risks from shadow banking.
“China’s recovery is in quite good shape,” Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong, said in a telephone interview. “Domestic pro-growth policies are likely to wane in mid-2013,” yet demand from abroad may pick up in the second half, he said.
Improving investor confidence in China’s outlook has lifted mainland stocks and the currency. The Shanghai Composite Index (SHCOMP), the nation’s benchmark gauge, has advanced 18 percent from an almost four-year low on Dec. 3, including a 1.4 percent rise today.
Posted by cbasdeo09 on January 22, 2013
China’s manufacturing contraction persisted last month, Japanese industrial companies grew more pessimistic and South Korean exports fell, signaling East Asia’s biggest economies have yet to reverse their slowdowns.
A Chinese factory index was at 49.8 for September, the first time that it has been below 50 for two straight months since 2009, a statistics bureau report showed in Beijing today. Japan’s Tankan index of large manufacturers’ confidence fell to minus 3 for the past quarter. South Korean shipments slid for a third month.
In China, measures to support growth may be stepped up after the Communist Party dealt with political issues including laying charges against ousted Politburo member Bo Xilai and setting Nov. 8 for the start of a party congress, Bank of America Corp. said today. Japan’s fiscal response may be complicated by a parliamentary stand-off over financing and an election as early as this year, with Prime Minister Yoshihiko Noda reshuffling his cabinet today to revive support.
“We don’t expect a bounce back soon from the slowdowns in these East Asian economies,” said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo and a former central bank official.
Posted by byu2012 on October 6, 2012
Japan released yet more worrying figures on Friday, showing the world’s third largest economy was already stuttering before a damaging territorial dispute erupted with its largest trading partner.
Factory output in August shrank by a bigger-than-expected 1.3 per cent from the previous month, the industry ministry said as it admitted production activity was weakening.
The decline was much sharper than an average market forecast of a 0.4 per cent drop.
“Industrial production appears to be weakened,” the ministry said in a statement, downgrading its overall assessment. It had said a month ago that production appeared to be flat.
Japan’s export-driven economy is struggling to right itself following the March 2011 earthquake and tsunami disaster, while also suffering from Europe’s debt crisis, slowing Chinese demand and the strong yen.
Japanese businesses are now worried about taking a hit from the effects of a flare-up in the row between Tokyo and Beijing over the ownership of islands in the East China Sea.
Posted by byu2012 on October 6, 2012
Japan’s economy is leveling off as China’s slowing growth casts a deep shadow over production and exports.
The Bank of Japan’s quarterly Tankan survey released Oct. 1 showed a sharp loss of business confidence among automakers and steelmakers.
The diffusion index for large automakers plunged from 32 in the previous June survey to 19, while the diffusion index for large steelmakers sank from minus 17 to minus 28.
The 13-point drop for large automakers was the steepest among all industry sectors. Automakers are key customers for steelmakers.
The diffusion index for all large manufacturers, the headline component of the Tankan survey, dipped 2 points to minus 3, for the first fall in three quarters. The index stayed below zero for the fourth consecutive quarter.
The index is calculated by subtracting the percentage of companies reporting unfavorable business conditions from the percentage of companies reporting favorable conditions. A negative reading means pessimists outnumber optimists.
Posted by byu2012 on October 3, 2012
The recent spurt in the Japan-China conflict over the contested islands, Senkaku to Japan and Diaoyu to China, was not unexpected.
The surge in anti-Japanese sentiment in China is nothing new. The root of the Sino-Japanese conflict lies in the history of their ties. Anti-Japanese sentiment flared up in China in 2005 over the new Japanese textbooks, which seemed to gloss over Japanese war crimes.
In contrast, Indo-Japanese ties have rarely been hindered by political conflict, except when India went for nuclear testing. In fact, Japan has proved to be India’s true bilateral economic partner over the years.
Can the resurgence of anti-Japanese sentiment in China prove to be a blessing in disguise for India? Can it divert Japanese investment to India?
It is important to note that economic ties between Japan and China deepened over the last decade, notwithstanding historical scars. The question is how India can reap the benefits, even as it cannot match Chinese infrastructure and low costs.
During the 2000s, China emerged as a favourite destination of Japanese investors. Japanese investment in China surged from a paltry $935 million in 2000 to $12,649 million in 2011.
Posted by byu2012 on October 3, 2012
Japan’s unilateral move of the so-called “purchase” of the Diaoyu Islands, which are Chinese territories, two weeks ago has taken its toll on bilateral economic and trade ties, experts said on Tuesday.
Chinese people intending on traveling to Japan have been bogged down. Heavyweight travel agencies, including China International Travel Service Limited, China Comfort Travel and China CYTS Tours Holding Co., Ltd., have halted travel business to Japan.
As far as Chinese travel to Japan is concerned, the impact of Diaoyu Islands rift could go as deep as the 2011 Fukushima earthquake, said a manager from the Marketing Department of the China CYTS, who preferred to be anonymous.
More Chinese organizations and groups canceled their travel plans to Japan in a bid to show strong protests and firm opposition to Tokyo’s rash move of “purchase”, media reports said.
Flights between China and Japan have been hampered in terms of flights being cut and delays of new routes opening. All Nippon Airways Co., Ltd. and Japan Airlines Co., Ltd. canceled up to 23,000 seats on routes to China during the last few weeks.
Posted by byu2012 on October 2, 2012
Japan might be the third largest economy in the world, but the past 20 years have seen its GDP growth rate fall behind that of its economic rivals, the US and UK.
The outlook appears bleak. Recently, Japan halved its second-quarter growth estimate, raising fears of a recession. Morever, Japan’s exporters could face more pressure after the US Federal Reserve announced a third round of quantitative easing, which could drive down the US dollar against the yen.
Pressure to deal with the country’s darkening economic outlook has fallen to the Japanese government (whose deficit financing bill probably won’t make it through the opposition-ruled upper house).
Meanwhile, Japan’s central bank has vowed to maintain its monetary easing policy.
Ippei Fujiwara from the Australian National University examines the long-term economic health of the nation and suggests societal ageing and a lack of technological growth could be to blame for the country’s falling GDP growth rate.
Posted by byu2012 on September 29, 2012