Latest news with #BOJ
Yahoo
4 hours ago
- Business
- Yahoo
Japan's Rate Showdown: Suntory CEO Calls Out BOJ as Yen Sinks
Suntory Holdings (STBFF) CEO Takeshi Niinami isn't holding back. Speaking both on Bloomberg TV and at a press conference this week, Niinami urged the Bank of Japan to raise rates this weeka bold call from one of Japan's most influential corporate voices. As chair of the Japan Association of Corporate Executives, he warned that continued inaction could deepen inflationary pressure and leave the central bank scrambling to catch up. It will be the governor's responsibility, he said, pointing directly at BOJ Governor Kazuo Ueda. With long-term bond yields creeping up and consumer prices climbing, Niinami's message was clear: waiting is no longer a luxury. Warning! GuruFocus has detected 2 Warning Sign with STBFF. The backdrop? A yen that keeps fallingand taking Japanese households down with it. As raw material and food imports get more expensive, the currency's weakness is starting to hit hard. Niinami stressed that Japan's dependence on overseas supplies makes the cost-of-living spike unavoidable. His tone wasn't just cautiousit was urgent. The current weak yen affects the life of the people in Japan daily, he said, adding that policymakers need to make the appropriate decision now. While markets widely expect the BOJ to stay put this week, pressure is building fast. One factor that may have been keeping BOJ on ice: the recently concluded trade deal with President Donald Trump's administration. Now that the deal's done, central bank officials are reportedly seeing more room to maneuverwith talk of a potential hike later this year if the data lines up. But for Niinami, that could be too little, too late. Every tariff issue will be settled, he said, and then I believe the BOJ must increase interest rates. Investors won't have to wait longUeda and team wrap up their policy meeting Friday. Eyes will be on the outcome. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
4 hours ago
- Business
- Yahoo
Japan's Rate Showdown: Suntory CEO Calls Out BOJ as Yen Sinks
Suntory Holdings (STBFF) CEO Takeshi Niinami isn't holding back. Speaking both on Bloomberg TV and at a press conference this week, Niinami urged the Bank of Japan to raise rates this weeka bold call from one of Japan's most influential corporate voices. As chair of the Japan Association of Corporate Executives, he warned that continued inaction could deepen inflationary pressure and leave the central bank scrambling to catch up. It will be the governor's responsibility, he said, pointing directly at BOJ Governor Kazuo Ueda. With long-term bond yields creeping up and consumer prices climbing, Niinami's message was clear: waiting is no longer a luxury. Warning! GuruFocus has detected 2 Warning Sign with STBFF. The backdrop? A yen that keeps fallingand taking Japanese households down with it. As raw material and food imports get more expensive, the currency's weakness is starting to hit hard. Niinami stressed that Japan's dependence on overseas supplies makes the cost-of-living spike unavoidable. His tone wasn't just cautiousit was urgent. The current weak yen affects the life of the people in Japan daily, he said, adding that policymakers need to make the appropriate decision now. While markets widely expect the BOJ to stay put this week, pressure is building fast. One factor that may have been keeping BOJ on ice: the recently concluded trade deal with President Donald Trump's administration. Now that the deal's done, central bank officials are reportedly seeing more room to maneuverwith talk of a potential hike later this year if the data lines up. But for Niinami, that could be too little, too late. Every tariff issue will be settled, he said, and then I believe the BOJ must increase interest rates. Investors won't have to wait longUeda and team wrap up their policy meeting Friday. Eyes will be on the outcome. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
15 hours ago
- Business
- Mint
Japan two-year bond sale draws strongest demand since October
Japan's two-year government bond auction Tuesday drew the strongest demand since October as investors were attracted to bond yields that have approached the highest since 2008. Appetite for this maturity debt — which is sensitive to the outlook for monetary policy — has also been supported by continued demand for Bank of Japan-eligible collateral and surplus cash management. The average bid-to-cover ratio was 4.47, compared with 3.90 in a sale last month and the 12-month average of 3.99. In another sign of firm demand, the tail, or gap between average and lowest-accepted prices, was 0.005, compared with 0.012 at the previous sale. The sale's impact rippled into the secondary market, with two-year bonds advancing, which nudged the yield down by two basis points to 0.82%. This slight drop in yields Tuesday contrasts with the broad trend in recent months, which has seen them moving higher on both short- and long-maturity debt. The auction also comes ahead of a policy meeting Wednesday and Thursday by BOJ, which is expected to hold its benchmark interest rate steady at the gathering. Yet central bank officials see the possibility of another interest rate hike this year, according to people familiar with the matter. 'The two-year bond auction drew strong results, with yields rising to levels that reflect expectations of a BOJ rate hike,' said Takashi Fujiwara, chief fund manager at Resona Asset Management. 'The yield level is good in terms of reflecting rate hike expectations, and holding the bond is unlikely to result in losses.' Still, the signs of strong demand may not be enough to change the upward trajectory of yields. A risk-neutral yield, which signals a future path of short-term interest rates, has climbed to 0.7%, the highest in almost four months, according to estimates by Daiwa Securities. The move reflects renewed expectations that the Bank of Japan will raise its policy rate following the trade agreement with the US. - Masaki Kondo, Rates/FX strategist Traders of overnight index swaps are pricing in about a 75% chance the BOJ will hike rates by year-end, up from around 57% at start of the month. The benchmark interest rate is currently 0.5%. Japan securing a trade deal with the US last week — which set tariffs at a lower-than-feared 15% — has reduced some uncertainty for the BOJ as it considers the need for higher interest rates to curb inflation. One area of uncertainty that remains is politics, with a question mark hanging over Prime Minister Shigeru Ishiba's future after the ruling Liberal Democratic Party-led coalition lost its majority in the upper house. This has raised concerns that government spending may increase while taxes are reduced, which has fueled an advance in yields on longer-maturity Japanese government debt. Ishiba's leadership is seen as bond-friendly due to his strict stance on fiscal discipline.
Business Times
2 days ago
- Business
- Business Times
BOJ may paint less gloomy view, signal rate-hike resumption
[TOKYO] The Bank of Japan (BOJ) is set to hold off raising interest rates on Thursday (Jul 31) but may offer a less gloomy view on the outlook after Tokyo's trade agreement with the US last week, signalling rate hikes may resume later this year. Receding global trade tensions following Sunday's agreement between the US and the European Union add relief for BOJ policymakers on the outlook of Japan's export-heavy economy. But the BOJ is likely to warn of lingering uncertainty on how US tariffs affect business activity with the hit to exports seen intensifying later this year, analysts say. 'It's very big progress that reduces uncertainty for Japan's economy – but obviously, some uncertainty remains,' BOJ Deputy Governor Shinichi Uchida said last week on the Japan-US trade deal. Uchida noted questions around how soon Washington strikes trade deals with other countries, how the tariffs affect domestic and global economies and how long it could take for the tariffs' effects to be seen in hard data. At the two-day meeting ending on Thursday, the BOJ is widely expected to keep short-term interest rates steady at 0.5 per cent. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Markets are focusing on the bank's quarterly outlook report and Governor Kazuo Ueda's post-meeting news conference for clues on the timing of the next rate hike. A Reuters poll, taken before last week's Japan-US trade deal announcement, showed a majority of economists expect the BOJ to raise rates again by year-end. In the quarterly report, the BOJ is likely to revise up this fiscal year's inflation forecast due to persistent rises in rice and other food costs, sources have told Reuters. The BOJ may also tweak its current view that risks to the price outlook were skewed to the downside, and offer a less gloomy view on the economy compared with the current one focused on tariff-induced risks, according to separate sources. The board is likely to maintain its view that inflation will durably hit its 2 per cent target in the latter half of its three-year projection period running through fiscal 2027, they said. In current projections made on May 1, the BOJ projects core consumer inflation to hit 2.2 per cent in fiscal 2025, before slowing to 1.7 per cent in 2026 and 1.9 per cent in 2027. Japan struck a trade deal with President Donald Trump last week that lowers US tariffs for imports of goods, including its mainstay automobiles, easing the pain for the export-reliant economy and clearing a key hurdle for further BOJ rate hikes. The positive development contrasts with the gloom that surrounded the economy on May 1, when the BOJ produced its current estimates amid heightened market volatility caused by Trump's April announcement of sweeping 'reciprocal' tariffs. The BOJ exited a decade-long, massive stimulus last year and raised its short-term policy rate to 0.5 per cent in January on the view that Japan was progressing towards durably achieving its price goal. With rising food costs hurting households and keeping inflation above its 2 per cent target for three years, some hawkish board members have highlighted mounting price pressures that could justify resuming rate hikes. REUTERS
Business Recorder
2 days ago
- Business
- Business Recorder
JGBs rebound as traders reassess BOJ rate-hike trajectory
TOKYO: Japan's shorter-dated government bonds rose on Monday, recovering from a sell-off last week, as investors re-evaluated the pace of Bank of Japan's rate hikes. The 10-year JGB yield fell 4.5 basis points (bps) to 1.555%, after surging to 1.605% on Friday, its highest level since October 2008. The five-year yield fell 4 bps to 1.11%. Yields move inversely to bond prices. 'The yields rose last week on expectations that the BOJ would raise interest rates by the end of this year,' said Naoya Hasegawa, chief bond strategist at Okasan Securities. 'But investors wanted to wait and see the central bank's message about the next interest rate hike at the end of the policy meeting this week.' The BOJ will hold its next policy meeting on July 30-31, and the market expects the central bank to hold its policy rate unchanged. But a trade deal to lower the hefty tariffs U.S. President Donald Trump threatened to impose on goods from Japan opened scope for the BOJ to raise interest rates again this year, sources said. Swap rates indicated a nearly 80% chance of the BOJ raising rates by 25 basis points to 0.75% at its policy meeting in December. 'The market wanted to know if there is a higher chance of the BOJ raising rates earlier than December,' Haseagawa said. The 10-year JGB futures rose 0.48 yen to 137.91. The two-year JGB yield fell 1 bp to 0.845%. Yields on super-long dated bonds rose, with the 30-year JGB yield rising 1.5 bps to 3.075%. The 40-year JGB yield rose 1.5 bps to 3.365%. The 20-year JGBs have not been priced yet, as of 0540 GMT.
