Japan’s Finance Minister Suzuki said today that Japan is “no longer in deflation.” This is a major shift from previous comments from officials. In fact, it was just Tuesday that Suzuki was reported to have said that deflation cannot be declared defeated. Mr. Suzuki’s comments today clearly support the Bank of Japan’s policy tightening.
To tighten policy, the BOJ board needs to see wage results that support the outlook for sustained and stable inflation around the 2% target. The Japan Federation’s wage press conference is scheduled for 4:15pm Tokyo time (7:15pm GMT, 3:15am ET), which will give us some guidance. However, while the wage increases agreed to by large companies reported at today’s press conference will set an upper limit for Japanese companies as a whole, UBS said, “The amount of wage increases to be passed on to small and medium-sized companies is (March 22nd) and the third round (April 4th).The second round in particular is usually considered important as it covers more than half of the total number of companies targeted. It is being considered.”
The Bank of Japan meeting will be held on April 18th and 19th, and expectations are high that policy changes will be made at this meeting, but given the wage statistics to be released later this month and early April, the Bank of Japan meeting The Bank of Japan’s April 26 meeting may be a more reasonable option. pivot. In central bank land, a five week gap is nothing. That being said, the constant stream of news (Jiji Press, NHK, Nikkei reports, etc.) is about the March rate hike.
From China today: The People’s Bank of China has kept its medium-term lending facility (MLF) interest rate unchanged at 2.5% for the seventh consecutive month. In addition, the bank injected 387 billion yuan against the maturity of 500 billion yuan. This is the first net cash withdrawal through the MLF liquidity vehicle since November 2022.
In the daily USD/RMB benchmark rate setting, the rate was 7.0975 versus the expected 7.2058. The big difference, more than 10, almost 11, is the largest in 11 months. Banks continue to support the renminbi.
Regional stocks stalled following weakness on Wall Street triggered by another rise in inflation (PPI @ 1.6% vs expected 1.1%).
The US dollar joined Thursday’s gains, with USD/JPY rising to a high above 148.60 before running out of steam.
Bitcoin, and the broader crypto complex, has lost ground. At the time of my posting, BTC/USD is around $67,500.
