Latest news with #US-Japan
Business Times
an hour ago
- Business
- Business Times
Bank of Japan to hold rate steady with likely upgrade to price view
[TOKYO]The Bank of Japan (BOJ) is expected to keep its benchmark interest rate steady and boost its inflation outlook on Thursday (Jul 31), as investors look for hints of another rate hike this year after a US-Japan trade deal reduced some uncertainty. All 56 economists forecast governor Kazuo Ueda's board will leave the central bank's interest rate unchanged at 0.5 per cent at the end of a two-day policy meeting, according to a Bloomberg survey this month. In the bank's quarterly economic outlook report, the inflation projection for this fiscal year is likely to be revised higher, they said. A primary focus for this gathering will be the extent to which the BOJ signals another rate hike this year, with traders now seeing a roughly 75 per cent chance of a move by year-end. BOJ officials see the possibility of mulling of another hike after Japan's trade deal with the US diminished a key source of uncertainty, sources familiar with the matter said earlier. With the key task of discerning the actual impacts of the tariffs still remaining, the BOJ will not be looking to suddenly hike rates at this point. Deputy governor Shinichi Uchida, a key policy architect at the bank, said last week that while the deal is a major breakthrough, uncertainty remains high. Still, the search for rate hike hints from the BOJ is gradually gaining momentum, with October becoming more popular as the potential timing for the next increase. Last week, Deutsche Bank Securities and Barclays Securities both brought forward their calls to October. The US and Japan unexpectedly struck a pact on Jul 22, setting most tariffs at 15 per cent. The lowering of auto levies from the 25 per cent that Trump imposed in April, in particular, is set to provide relief for a core part of Japan's economy. That was followed by a similar agreement between the European Union and the US this week, easing concerns for the global economy. 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 The BOJ officials noted that the outcome of Japan's negotiation was roughly within the range of their expectations and it's probably unnecessary to make a drastic change to the central bank's overall economic outlook, sources familiar with the matter said earlier. In its April outlook report, the bank said that it expects economic growth to stall temporarily due to the tariffs, before picking up to bring underlying inflation to meet its goal sometime between October next year and March 2028. BOJ watchers expect Ueda's nine-member board to raise its median inflation forecast for this fiscal year to 2.5 per cent from 2.2 per cent, while keeping views for the following two years unchanged, according to a Bloomberg survey. The pace of increases in the cost of living has stayed elevated, averaging 3.5 per cent in the first three months of the fiscal year that began in April. Inflation has been driven by a surge in food prices and in particular rice, the nation's staple food. Former BOJ chief economist Hideo Hayakawa said that firmness in prices will allow the bank to raise its inflation projection for next year, but the bank will likely keep it below 2 per cent to avoid fuelling too much speculation over a rate hike. The Federal Reserve is set to announce its policy decision hours before the BOJ, and its conclusion and signals could have major implications for the course of the yen. As at Tuesday, the Japanese currency has dropped the most against the US dollar in the past three months among major currencies, as the Fed and the BOJ have both remained in a wait-and-see mode. Following repeated warnings from US President Donald Trump that Japan should not seek a trade advantage via a weak currency, Ueda's BOJ needs to strike a delicate balance to avoid sounding too cautious on raising borrowing costs. This is the first BOJ gathering after Prime Minister Shigeru Ishiba's ruling coalition sustained a historic defeat in an upper house election on Jul 20, reflecting high public discontent over inflation. With his government now lacking a majority in either house of parliament, the Japanese leader has been confronting resignation calls from both ruling and opposition party members. As with most other central banks, the BOJ typically does not comment on politics, but political instability could make navigating policy more complicated. After political parties pledged cash handouts or tax cuts ahead of the poll, the central bank will need to keep its eyes on the fiscal policy's impact on inflation and bond yields. Ueda usually holds a press conference at 3.30 pm to elaborate on the BOJ's thinking after the release of a policy statement and economic forecast around noon. Here are other key points to watch for
Bloomberg
4 hours ago
- Business
- Bloomberg
BOJ to Hold Rate Steady With Likely Upgrade to Price View
The Bank of Japan is expected to keep its benchmark interest rate steady and boost its inflation outlook Thursday, as investors look for hints of another rate hike this year after a US-Japan trade deal reduced some uncertainty. All 56 economists forecast Governor Kazuo Ueda's board will leave the central bank's interest rate unchanged at 0.5% at the end of a two-day policy meeting, according to a Bloomberg survey this month. In the bank's quarterly economic outlook report, the inflation projection for this fiscal year is likely to be revised higher, they said.
Japan Forward
18 hours ago
- General
- Japan Forward
James E Auer Honored in Memorial Service at Sea as 'A Bridge Between Nations'
On July 12, a memorial service was held for James E Auer, a United States Navy officer and scholar who dedicated his life to strengthening the Japan-US alliance. He passed away on May 16, 2024, at the age of 82 in Nashville, Tennessee. Auer made continuous contributions to US-Japan security policy, leveraging the extensive network and knowledge he gained during his time in the US Navy. He was also a prominent member of The Sankei Shimbun 's Seiron column and won the Seiron Prize in 2015, becoming the first foreigner to receive it. On the deck of the JS Bungo, JMSDF buglers play taps following the commitment of his ashes to the Sea of Japan. (©JMSDF) The ceremony was held off the coast of Maizuru City in Kyoto Prefecture, marking the first-ever joint burial at sea of an American by the Japan Maritime Self-Defense Force (JMSDF) and the US Navy. Auer had requested in his will that his ashes be scattered at sea by a JMSDF minesweeper in the Sea of Japan. About 60 family members and others influenced by his work attended the service. The ceremony took place on the deck of the JMSDF minesweeper tender, JS Bungo . Surrounded by his eldest son and family, Auer's urn was quietly cast into the Sea of Japan, under the Stars and Stripes held by JMSDF personnel. With his extensive experience in the US Navy and research on the JMSDF, Auer made significant contributions to minesweeping operations. This made the setting especially fitting for honoring his legacy. At the ceremony, Admiral Akira Saito, Chief of Staff of the JMSDF, praised Auer's former students. He noted that they now play a central role in Japan's maritime defense strategy. Rear Admiral Ian Johnson, Commander of the US Navy in Japan, also expressed his sorrow at Auer's passing. Auer was a trusted bridge between the US Navy and the JMSDF, he proclaimed. Akihisa Nagashima, one of Auer's former students, also spoke. He is now Special Advisor to the Prime Minister on national security. Nagashima praised Auer for "directly addressing critical issues, such as the legal framework for collective defense and the role of US forces stationed in Japan." He also highlighted Auer's significant contributions to the security environment in the Asia-Pacific region. Member of the Diet and Advisor to the Prime Minister, Akihisa Nagashima pays respect to his mentor, Jim Auer. From the deck of the JS Bungo. (©JMSDF) (Read the article in Japanese.) Author: Hideki Yoshimura, The Sankei Shimbun
Korea Herald
18 hours ago
- Business
- Korea Herald
FM Cho seeks stronger trilateral cooperation with US, Japan
Cho draws line on speculations of in-depth discussion on US-Japan trade deal with Iwaya Foreign Minister Cho Hyun headed to Tokyo on Tuesday to advance trilateral cooperation with the US and Japan, amid mounting pressure faced by Seoul as the deadline for tariff negotiations with the Donald Trump administration fast approaches. 'By visiting Japan first (ahead of the US), we plan to go beyond improving South Korea-Japan bilateral relations and improve trilateral cooperation among South Korea, US and Japan, while upgrading our overall foreign policy to align with the Lee Jae Myung administration's pragmatic foreign policy stance,' Cho told reporters at Gimpo International Airport. Cho's remarks came before departing for a two-day trip to Tokyo for a one-on-one meeting with Japanese Foreign Minister Takeshi Iwaya. He will then fly to Washington on Wednesday for talks with US Secretary of State Marco Rubio scheduled for Friday. Cho's visits to Tokyo and Washington come as South Korean officials ramp up efforts to seal a deal with the Trump administration, and reduce 25 percent 'reciprocal' tariffs before their planned implementation on Friday. The South Korean official drew the line, however, on speculations that he will hold an in-depth talk on the trade deal reached between US and Japan with Iwaya. Last week, Tokyo managed to strike a deal, reducing the initial US tariff of 25 percent on key export items to 15 percent. The trade deal reached between Washington and Tokyo involves Japan's $550 billion investment in core American industries. 'I could hear an explanation about the tariff negotiations between the US and Japan, but I believe we do not necessarily need to (go into detail) because the direction of (the negotiations) is different from ours,' Cho explained to reporters. South Korea's industry minister recently pitched to his US counterpart to make capital investments in the US' shipbuilding industry, coupled with other investments from state-run banks here. On the possibility of Japanese Prime Minister Shigeru Ishiba visiting Seoul, Cho indirectly pointed to uncertainties stemming from the heavy loss of his ruling Liberal Democratic Party in the July upper house election in Japan. 'We cannot be certain as the Japanese government has yet to be stabilized … But such a message (conveying our hopes for his visit to Seoul) will be delivered to Japan,' Cho said. According to Seoul's Foreign Ministry, the talks with Iwaya will be followed by a working dinner. The latest trip is set to mark Cho's first bilateral talks with his respective Japanese and US counterparts since taking office early last week.
The Star
a day ago
- Business
- The Star
Japan expects bulk of US fund to be in loans
TOKYO: Japan expects only 1% to 2% of its recently agreed upon US$550bil American fund to be in the form of actual investment, with the bulk of it being loans, according to the nation's top chief negotiator Ryosei Akazawa. At the same time, Tokyo would save roughly 10 trillion yen through lower tariff rates in its deal with the United States, he said. The US$550bil investment framework will be a combination of investments, loans and loan guarantees provided by financial institutions backed by the Japanese government, Akazawa said on public broadcaster NHK on Saturday night. Of the total, investment would be worth 1% or 2% and the United States and Japan would split the profits of that investment at a ratio of 90-10, he said. Japan had originally proposed a 50-50 ratio, he added. The fund is the centrepiece of the deal announced by the two sides that will impose 15% tariffs on Japanese cars and other goods. But the details given by Akazawa suggested the Japanese may end up giving up much less than at first glance. The comments came as officials from countries with deals with the United States sift through the terms to explain to the public what they entail. 'It's not that US$550bil in cash will be sent to the United States,' Akazawa said. 'By letting the United States have 90% of the profits rather than 50%, I think Japan's loss will be at most a couple of tens of billions of yen. 'People are saying various things, such as 'You sold out Japan', but they're wrong,' he added. For the loans provided through the programme, Japan will simply be collecting the interest payments, and for the loan guarantees, if nothing happens Japan will also be just collecting fees, Akazawa said. 'For that part, Japan's just making money,' he said. Akazawa also clarified that the investment programme won't be only supporting Japanese and US firms. As a potential example, he cited a Taiwanese semiconductor firm building a factory in the United States. 'We'd like to put the US$550bil in place during President Trump's term,' Akazawa added. Further details of the implementation of the US-Japan deal remain unclear, including when the new tariff rates would take effect and when the new investment vehicle would kick off. There's been no joint document signed by both sides for the deal, although the White House has published a fact sheet. — Bloomberg
