Rolling coverage of the latest economic and financial news
Bank of Japan governor Kazuo Ueda is briefing reporters in Tokyo now about today’s interest rate decision.
Ueda points out that the move will only raise short-term interest rates by 0.1%, and pledges that the BoJ will “increase bond buying nimbly” if it sees a sharp rise in long-term rates.
I don’t think deposits or lending rates will rise sharply from today’s decision.
“We reverted to a normal monetary policy targeting short-term interest rates, as with other central banks. We will choose the appropriate level of short-term rates in line with our economic and price outlook. But in doing so, we need to be mindful that there is some distance for inflation expectations to reach 2%. When we focus on this gap, it’s necessary to maintain accommodative monetary conditions even under a normal monetary policy framework.”
The Bank of Japan lifted rates for the first time in seventeen years while also dialling back its asset purchases and scrapping its yield curve control program. Despite swaps implying that – at best – five points of the 10-point hike was baked into the market, the reaction was limited, if not slightly paradoxical.
The Yen slid, and the Nikkei popped, the latter taking its lead from the former, which arguably has been sold after a build-up in long positioning going into the event. Nevertheless, the meeting was one of the market’s great non-events, although there could still yet be a response when European and US markets come online.
Continue reading…Rolling coverage of the latest economic and financial newsJapan raises interest rates for first time since 2007Bank of Japan governor Kazuo Ueda is briefing reporters in Tokyo now about today’s interest rate decision.Ueda points out that the move will only raise short-term interest rates by 0.1%, and pledges that the BoJ will “increase bond buying nimbly” if it sees a sharp rise in long-term rates.I don’t think deposits or lending rates will rise sharply from today’s decision.“We reverted to a normal monetary policy targeting short-term interest rates, as with other central banks. We will choose the appropriate level of short-term rates in line with our economic and price outlook. But in doing so, we need to be mindful that there is some distance for inflation expectations to reach 2%. When we focus on this gap, it’s necessary to maintain accommodative monetary conditions even under a normal monetary policy framework.”The Bank of Japan lifted rates for the first time in seventeen years while also dialling back its asset purchases and scrapping its yield curve control program. Despite swaps implying that – at best – five points of the 10-point hike was baked into the market, the reaction was limited, if not slightly paradoxical.The Yen slid, and the Nikkei popped, the latter taking its lead from the former, which arguably has been sold after a build-up in long positioning going into the event. Nevertheless, the meeting was one of the market’s great non-events, although there could still yet be a response when European and US markets come online. Continue reading…
