net_left adver left

Global risks to keep BOJ from adjusting yield cap next year - ex-central bank executive

Thursday, November 24, 2022
Global risks to keep BOJ from adjusting yield cap next year - ex-central bank executive © Reuters. FILE PHOTO: People walk past the Bank of Japan building in Tokyo, Japan June 16, 2017. REUTERS/Toru Hanai

By Leika Kihara and Takahiko Wada

TOKYO (Reuters) - Growing risks of a global economic slowdown will likely prevent the Bank of Japan (BOJ) from phasing out its stimulus programme, at least until 2024, former BOJ executive Kazuo Momma told Reuters on Thursday.

With central banks around the world raising interest rates to cope with soaring inflation, markets are rife with speculation the BOJ, too, will adjust yield curve control (YCC) and allow long-term interest rates to rise more when dovish Governor Haruhiko Kuroda's term ends in April next year.

Given the rising cost of prolonged easing, the BOJ must eventually abandon YCC, which combines a negative short-term rate target with a zero-interest rate cap for 10-year bond yields, and revert to a policy that guides short-term rates around zero, Momma said.

But the BOJ would likely hold off on taking such steps next year as growing prospects of a U.S. recession weigh on Japan's export-reliant economy, he said.

"The BOJ's next biggest challenge is to ditch YCC and negative rates, and shift to a zero-interest rate policy," said Momma, who has experience drafting monetary policy and retains close contact with incumbent policymakers.

"That's hard to do next year, when Japan's economy face headwinds from slowing global growth," Momma said. "It's more likely to happen in 2024, when the economy recovers and there's more clarity on whether wages would rise sustainably," he said in an interview.

Prolonged ultra-low interest rates have hurt the profits of financial institutions, while the BOJ's relentless bond buying to defend its yield cap has distorted the shape of the yield curve.

BOJ policymakers will likely pay more attention to such side-effects and begin laying the groundwork for an eventual shift away from YCC, Momma said.

In ending YCC, the BOJ will offer no advance signals but minimise any market disruption from the announcement by offering to buy bonds flexibly until yield moves stabilise, he said.

The BOJ will also make clear an end to YCC won't be the start of full-blown monetary tightening, but a gradual shift to a more "normal" form of monetary easing, Momma said.

The timing of such a policy adjustment would depend largely on the outlook for wages and the strength of the economy, he said.

"It's very important that Japan sees a virtuous cycle where higher wages drive up inflation. Without that, it's hard for the BOJ to seek an exit from current policy," said Momma, who is currently executive economist at private think tank Mizuho Research & Technologies.

Leave your comment
HOT AUTO TRADE BOT SOFTWARE adver right
APPROVED BROKERS
net_home_top HOT AUTO TRADE BOT SOFTWARE
02-12-2022 20:30:22 (UTC+7)

EUR/USD

1.0479

-0.0043 (-0.41%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (3)

EUR/USD

1.0479

-0.0043 (-0.41%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (3)

GBP/USD

1.2220

-0.0034 (-0.27%)

Summary

Buy

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (8)

Sell (1)

USD/JPY

134.21

-1.07 (-0.79%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (2)

Sell (7)

AUD/USD

0.6769

-0.0040 (-0.58%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (7)

USD/CAD

1.3482

+0.0050 (+0.37%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (1)

Sell (6)

EUR/JPY

141.41

-0.94 (-0.66%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

EUR/CHF

0.9840

-0.0019 (-0.19%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (1)

Gold Futures

1,802.45

-12.75 (-0.70%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (9)

Silver Futures

22.830

-0.011 (-0.05%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (2)

Sell (8)

Copper Futures

3.7775

-0.0400 (-1.05%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (10)

Crude Oil WTI Futures

81.62

+0.40 (+0.49%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (2)

Sell (4)

Brent Oil Futures

87.35

+0.47 (+0.54%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (5)

Sell (2)

Natural Gas Futures

6.623

-0.115 (-1.71%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

US Coffee C Futures

161.95

-3.80 (-2.29%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (1)

Sell (10)

Euro Stoxx 50

3,963.65

-20.85 (-0.52%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (0)

Sell (8)

S&P 500

4,076.57

-3.54 (-0.09%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (9)

DAX

14,463.95

-26.35 (-0.18%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (7)

FTSE 100

7,527.60

-30.89 (-0.41%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (4)

Sell (2)

Hang Seng

18,675.35

-61.09 (-0.33%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

US Small Cap 2000

1,884.57

-2.01 (-0.11%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (3)

IBEX 35

8,371.87

-36.03 (-0.43%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (0)

Sell (8)

BASF SE NA O.N.

48.15

0.290 (0.61%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (1)

Sell (5)

Bayer AG NA

55

-0.03 (-0.05%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (8)

Allianz SE VNA O.N.

202.6

-1.15 (-0.56%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (10)

Adidas AG

123.85

-1.07 (-0.86%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (5)

Deutsche Lufthansa AG

7.708

0.132 (1.74%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (9)

Siemens AG Class N

133.32

-0.34 (-0.25%)

Summary

↑ Sell

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (0)

Sell (9)

Deutsche Bank AG

9.92

0.015 (0.15%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (7)

 EUR/USD1.0479↑ Buy
 GBP/USD1.2220Buy
 USD/JPY134.21Neutral
 AUD/USD0.6769↑ Sell
 USD/CAD1.3482↑ Sell
 EUR/JPY141.41↑ Buy
 EUR/CHF0.9840↑ Buy
 Gold1,802.45↑ Sell
 Silver22.830Neutral
 Copper3.7775↑ Sell
 Crude Oil WTI81.62Neutral
 Brent Oil87.35↑ Buy
 Natural Gas6.623↑ Sell
 US Coffee C161.95↑ Sell
 Euro Stoxx 503,963.65↑ Sell
 S&P 5004,076.57↑ Sell
 DAX14,463.95↑ Sell
 FTSE 1007,527.60↑ Buy
 Hang Seng18,675.35↑ Sell
 Small Cap 20001,884.57↑ Buy
 IBEX 358,371.87↑ Sell
 BASF48.15↑ Sell
 Bayer55↑ Sell
 Allianz202.6↑ Sell
 Adidas123.85↑ Sell
 Lufthansa7.708↑ Sell
 Siemens AG133.32↑ Sell
 Deutsche Bank AG9.92↑ Sell
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,600/ 6,670
(-40/ -40) # 1,414
SJC HCM6,620/ 6,700
(-15/ -15) # 1,444
SJC Hanoi6,620/ 6,702
(-15/ -15) # 1,446
SJC Danang6,620/ 6,702
(-15/ -15) # 1,446
SJC Nhatrang6,620/ 6,702
(-15/ -15) # 1,446
SJC Cantho6,620/ 6,702
(-15/ -15) # 1,446
Cập nhật 02-12-2022 20:30:24
Xem lịch sử giá vàng SJC: nhấn đây!
ↀ Giá vàng thế giới
$1,797.62-4.81-0.27%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-V23.83024.300
RON 95-III22.70023.150
E5 RON 92-II21.67022.100
DO 0.05S23.21023.670
DO 0,001S-V25.19025.690
Dầu hỏa 2-K23.56024.030
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD23.930,0024.240,00
EUR24.695,6126.077,28
GBP28.769,6729.995,10
JPY174,05184,25
KRW16,0519,55
Cập nhật lúc 18:54:05 02/12/2022
Xem bảng tỷ giá hối đoái
adver main right