BOJ sets aside maximum provisions for bond transactions, Nikkei reports
June 2 (Reuters) - The Bank of Japan has set aside the maximum provision for losses on bond transactions, the Nikkei reported on Monday.
For fiscal 2024, BOJ raised the level of provisions to 100% for the first time, signaling that the central bank expects higher interest payments to financial institutions to impact its capital base, the newspaper reported.
Japan's central bank kept short-term interest rates steady at 0.5% in its May meeting, with pressures mounting to keep hiking borrowing costs.
BOJ did not immediately respond to a Reuters request for comment.
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The Independent
28 minutes ago
- The Independent
Lee Jae Myung: Can the man set to be next leader bring stability to South Korea?
Just three years after narrowly losing the presidential election to conservative Yoon Suk Yeol, Lee Jae Myung has emerged, phoenix-like, as the new leader of South Korea. Such a prospect appeared unlikely until a few months ago as the leader of the liberal Democratic Party grappled with a raft of legal troubles and scandals. But after Yoon made a botched attempt to place South Korea under martial law in December and, as a consequence, was impeached out of office, Lee projected himself as a protector of the democratic order and started to gain in public polls. Now Lee is poised to become the next South Korean president, exit polls showed, with the 61-year-old set to succeed Yoon in a deeply polarised and politically weary nation. His rise to the cusp of power, though, also raises a critical question: is he the steady hand South Korea needs when the corruption investigations and abuse of power allegations against him are certain to cast a shadow over his presidency? Lee, described by his advisers as a 'gladiator in a suit', moved quickly into the spotlight as he aggressively countered Yoon's disastrous martial law decree. During the crisis in late 2024, he climbed onto the fence of the National Assembly building to evade the president's security guards and documented the chaos on a livestream. Analysts remain sceptical about his ability to provide the stable leadership the country needs. While he campaigned as a pragmatist focused on domestic issues, his record of confrontational politics, ongoing legal troubles and polarising rhetoric raise doubts about his capacity to unite a divided nation. 'Lee appears to be holding the lead against his main conservative rival. His legal problems cast a shadow, and depending on developments, South Korea's political leadership problems may continue even if he wins the election,' Naoko Aoki, political scientist at RAND, told The Independent earlier. Yoon's martial law declaration created months of political instability, triggering a wave of public discontent with his People Power Party that Lee sought to ride into the top spot. The People Power Party's Kim Moon Soo consistently trailed in polls despite projecting himself as a moderate going up against the 'harbinger of monster politics and dictatorship', as he has described Lee. Kim was aware of the need to attract the centrist vote if he were to have any chance against the liberal frontrunner. Sojin Lim, co-director of Korean Studies at the University of Central Lancashire, offered a bleak picture of the emerging political scenario, arguing that the prospect of Lee winning was concerning. 'It does not appear that any of the current presidential candidates have the potential to be effective leaders in South Korea, particularly in addressing the multiple challenges the country faces both domestically and internationally,' she tells The Independent. 'In the case of Lee, the outlook seems even more concerning, given his past leadership style and the ongoing legal cases against him,' he adds. 'His approach has often been confrontational rather than conciliatory, which may not align with the consensus-building leadership South Korea urgently requires.' Lee has positioned himself as a pragmatic leader, advocating for policies that appeal to a broad electorate. His proposals, addressing calls for reducing presidential powers after Yoon's actions, include affecting constitutional changes to have a two-term presidency, a run-off election system, and parliamentary nomination of the prime minister. He also aims to shorten the work week, raise the retirement age, and combat the population crisis with housing and tax benefits for families. Lim says what sets Lee apart is his populist platform, centred on expansive welfare pledges like a universal basic income which appeal to economically discontented voters but risk deepening existing political divisions. The liberal leader's 'confrontational rhetoric and polarising leadership style may alienate conservative factions, making bipartisan cooperation difficult in an already fragile political climate', she explains. 'To govern effectively he would need to temper his populist agenda with inclusive policymaking and deliberate efforts to bridge ideological and/or political divides.' Lee has sought to resonate with younger voters by donning blue-and-red Reebok sneakers, colours of the national flag. The wearing of those sneakers, which quickly became a coveted commodity after he started wearing them on the campaign trail, was a conscious choice, aimed at playing up one of his pledges to unite South Korea's liberal and conservative voters. Lee was born to a family of farmers in a remote mountain village in the country's southeastern region. He worked in chemical factories as a child, suffering an industrial accident that left him with a permanent injury to his arm and impaired hearing. He has used his rags-to-riches story on the campaign trail, bringing up his impoverished childhood to focus on economic equality. He grew up to study law on a scholarship, passed the Bar in 1986 and worked as a human rights and labour lawyer for about two decades. He made his political debut in 2005 with the Uri Party, a predecessor to the Democratic Party, and was elected mayor of Seongnam, south of Seoul, five years later. Aiming for higher office, he contested and won the 2018 election for governor of Gyeonggi-do, South Korea's most populous province. Now set to lead the country, Lee is seeking to reconcile his image as a polarising populist with the more measured, pragmatic tone of his current campaign. 'Lee is running as a pragmatist and his campaign proposals have been less polarising than in the past,' Aoki said earlier. 'If he wins, the key thing is whether he can stick to those positions.' Managing relations with South Korea's neighbours, especially North Korea and China, is set to be one of the key challenges for the incoming president. Unlike Yoon, who pursued a more hardline approach towards North Korea, Lee has said he would seek to ease tensions by restoring a military hotline and a military agreement ditched by Pyongyang amid rising animosity in 2023. 'North Korea continues to remain a political focus during the campaigning. No matter who wins in this election, they might have a slight departure from former president Yoon Suk Yeol 's hardline approach on North Korea and China,' Dr Jagannath Panda, head of the Stockholm Centre for South Asian and Indo-Pacific Affairs at the Institute for Security and Development Policy in Sweden, told The Independent earlier. Aoki says Lee possibly extending an olive branch to Pyongyang is not surprising. 'His official platform does not include, for example, grand gestures like inter-Korean summits or economic cooperation but rather focuses on smaller trust-building measures,' she adds. Now that Lee has won, he will have to deal with a string of legal cases, including a $1bn property development scandal from his time as mayor of Seongnam. In what is known as the 'Daejang-dong scandal', he has been indicted on charges of bribery, corruption, breach of trust, and conflicts of interest. In another legal case, Lee was convicted last November of violating the election law for making a false statement during a debate in the 2022 presidential campaign. An appeals court overturned Lee's conviction, but the Supreme Court reinstated it and ordered a new sentence to be handed out. The sentencing, however, was postponed until after the election to avoid influencing the outcome. Another case is linked to an alleged scheme to use an underwear company to transfer funds to North Korea and facilitate a visit to Pyongyang when he was governor between 2019 and 2020. Lee has denied wrongdoing in all cases, calling them a 'witch hunt' by the People's Power Party to undermine his political career.
BreakingNews.ie
43 minutes ago
- BreakingNews.ie
Exit poll shows liberal candidate Lee forecast to win South Korean election
Liberal candidate Lee Jae-myung is forecast to win South Korea's snap presidential election, a joint exit poll on Tuesday showed. The poll comes two months after his rival and then-conservative president Yoon Suk Yeol was removed from office over his short-lived imposition of martial law. Advertisement The exit poll by South Korea's three major TV stations – KBS, MBC and SBS – showed Mr Lee projected to obtain 51.7% of the total votes cast, beating conservative candidate Kim Moon Soo on 39.3%. Pre-election surveys also suggested Mr Lee appeared headed for an easy win, riding on deep public frustration over the conservatives in the wake of Mr Yoon's martial law debacle. Yoon Suk Yeol (Kim Do-hun/Yonhap via AP) Mr Kim has struggled to win over moderate, swing voters as his People Power Party remains in a quagmire of internal feuding over how to view Mr Yoon's actions. The election serves as another defining moment in the country's resilient democracy, but observers worry a domestic divide worsened after Mr Yoon's martial law stunt is far from over and could pose a big political burden on the new president. Advertisement The past six months saw large crowds of people rallying in the streets to either denounce or support Mr Yoon, while a leadership vacuum caused by Mr Yoon's impeachment and ensuing formal dismissal rattled the country's high-level diplomatic activities and financial markets. The winning candidate will immediately be sworn in as president on Wednesday for a single, full term of five years without the typical two-month transition period. The new president will face major challenges including a slowing economy, US president Donald Trump's America-first policies and North Korea's evolving nuclear threats. Voting began at 6am local time at 14,295 polling stations nationwide, with polls closing at 8pm. Observers say the winner could be announced as early as midnight. Advertisement More than 19 million people had cast their ballots, according to the National Election Commission's tally as of 8.20pm. Combined with the 15 million who voted during last week's two-day early voting period, voter turnout stood at 78.4%. South Korea has 44.4 million eligible voters. In a Facebook posting on Tuesday, Mr Lee, whose Democratic Party led the legislative effort to oust Mr Yoon, called for voters to 'deliver a stern and resolute judgment' against the conservatives over martial law. Kim Moon Soo (Lee Jin-man/AP) In one of his final campaign speeches on Monday, Mr Lee argued that a win by Mr Kim would mean the 'the return of the rebellion forces, the destruction of democracy and the deprival of people's human rights'. He also promised to revitalise the economy, reduce inequality and ease national divisions. Advertisement Mr Kim, a former labour minister under Mr Yoon, warned that a Lee win would allow him to wield excessive power, launch political retaliation against opponents and legislate laws to protect him from various legal troubles, as his party already controls parliament. Mr Lee 'is now trying to seize all power in South Korea and establish a Hitler-like dictatorship,' Mr Kim told a rally in the south-eastern city of Busan.
The Guardian
an hour ago
- The Guardian
UK interest rates more uncertain due to Trump policies, says Bank governor
The Bank of England governor, Andrew Bailey, has told MPs that the future path of interest rates in the UK has become more uncertain because of Donald Trump's chaotic trade policy. Asked about the impact of on-off tariffs for the Bank's policymaking by the cross-party Treasury select committee, Bailey said 'the path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly'. The Bank's nine-member monetary policy committee (MPC) has cut interest rates four times – to 4.25% – since last summer, as inflation has slowed. Bailey warned that some businesses were now telling the Bank that they were pausing investment due to the uncertainty around trade barriers. 'The impact of fragmenting the world trading system is negative for world growth and world activity: it obviously increases uncertainty,' he told MPs. 'You hear it now when you go round the country from businesses. One impact of that is that it tends to cause delays and putting off of investment decisions.' He welcomed the UK's trade agreement with the US, but said that tariffs remained higher than before Trump came to power, and that because the UK is such an open economy, it is more affected by the wider global picture. 'The overall picture on trade now I'm afraid is one where the rules-based system is sort of dead,' he said. 'That has very serious consequences for the global economy.' Bailey also said he continues to expect wage growth to decline in the coming months – suggesting the MPC may feel more confident to cut rates. 'I have no evidence to doubt the steer from our agents' pay survey that come the end of this year … wage settlements should be around 3.7- 3.8%, which is a good percentage point below where we are now,' Bailey said. He added: 'That's going to be a crucial judgment going forward.' The governor also acknowledged that financial markets have been volatile in recent weeks as a result of rapidly changing US trade policy. 'This is having a big impact on markets; markets have moved quite a lot since our last meeting,' he said. He expressed particular concern about the market 'constellation' – where equity markets are falling, at the same time as US bond yields have risen and the dollar has depreciated – suggesting these periods have shifted White House policy. 'We had two periods in the post 'liberation day' period where that became quite acute, frankly. On both occasions, the administration did respond: the first led to the 90-day period to negotiate trade agreements, the second one concerned the position of chair Powell,' he said. 'We haven't seen that particular constellation since, because the equity markets haven't behaved in the same way. But I think we have to watch this very carefully, because the equity markets appear to be discounting a more optimistic view of how this will pan out.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Two external members of the MPC, Swati Dhingra and Catherine Mann, appeared alongside Bailey and explained their own voting decisions on interest rates. Dhingra, a trade expert, who has repeatedly voted for lower rates than the MPC has set, said she was concerned that keeping rates high may be damaging the economy's future capacity to grow. She suggested this could prompt her to support half-point cuts at future meetings. 'If for a long time we've held policy too tight, at some point that level and that time period over which policy has been too tight, starts to play a role, which means I now need to start thinking about, do I increase the decrements for which I've been voting or not?' she said. Mann, who voted for a half-point reduction in February, against the majority, but did not support the quarter-point cut the committee made last month, made clear she prefers more 'bold' moves. 'In order to make a clear statement about the stance of monetary policy appropriate for the UK, I think it's important to make a bolder move, and then to hold for longer,' she said.
