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Apr 25, 2014

Tokyo inflation hits 22-year high, inching toward BOJ goal

TOKYO (Reuters) – Tokyo’s inflation jumped to a 22-year high in April by a key measure, an early sign that companies are making progress in passing on a new tax increase to customers as policy makers seek to pull Japan out of years of deflation.

Friday’s data for the capital, a leading indicator of national trends showed much tamer inflation when the impact of the sales-tax hike is excluded. This underscores the daunting challenge for Prime Minister Shinzo Abe and the Bank of Japan in generating a positive cycle of prices, wages and spending.

Apr 25, 2014

Tokyo core CPI rises to 22-yr high after Japan’s April tax hike

TOKYO, April 25 (Reuters) – Core consumer prices in Tokyo, a
leading indicator of nationwide inflation, rose 2.7 percent in
April from a year earlier to mark the biggest gain in more than
two decades, offering the first glimpse on how Japan’s sales tax
hike is pushing up prices across the board.

Nationwide core consumer inflation also matched a five-year
high of 1.3 percent in March from a year ago, government data
showed on Friday, and is expected to track the Tokyo index’s
spike next month.

Apr 23, 2014

BOJ says 90 percent of banks taking on more risk post-QE

TOKYO (Reuters) – Over 90 percent of Japanese banks have increased loans and investment in riskier assets in the past year, the Bank of Japan said on Wednesday, suggesting that the wall of money it is pumping out is spilling over into the broader economy.

“Financial institutions have reduced investment in domestic bonds, especially Japanese government bonds (JGBs), while increasing investment in relatively high-risk assets such as loans,” the central bank said in a semi-annual report analyzing Japan’s financial system.

Apr 23, 2014

Japan inflation may have beat BOJ forecast – Kuroda

TOKYO, April 23 (Reuters) – Bank of Japan Governor Haruhiko
Kuroda said consumer inflation may exceed the central bank’s
projection in the fiscal year that ended in March, voicing
confidence the world’s third-largest economy continues to make
headway in meeting its price target.

Deputy Governor Hiroshi Nakaso added to the optimism,
stressing that Japan can withstand the pain from a sales tax
hike that kicked off this month as companies are increasing
hiring and wages due to brighter prospects for the economy.

Apr 21, 2014

Bank of Japan may still opt for huge JGB buys, when it acts: Suda

TOKYO (Reuters) – The Bank of Japan is likely to hold off on expanding monetary stimulus for as long as possible but when it does act, it will take “extraordinary” steps such as buying government bonds on a massive scale, a former central bank policymaker said on Monday.

Miyako Suda, who served on the BOJ board for a decade until 2011 and helped to plot Japan’s battle against deflation, added that despite some initial success the central bank is unlikely to meet its inflation target, since it is unclear how its huge asset purchases would lead to higher inflation expectations.

Apr 17, 2014

BOJ keeps upbeat view on regional Japan, sees limited tax hike impact

TOKYO, April 17 (Reuters) – The Bank of Japan maintained its
upbeat view on most of the country’s regional economies, adding
to reassurances from its governor that the world’s third-largest
economy can ride out the pain from a sales tax hike without
additional stimulus.

Also on Thursday, a Reuters survey showed manufacturers were
more confident about business conditions in April and saw a more
moderate dip over the next three months, suggesting the damage
from the tax hike may be less pronounced than thought.

Apr 16, 2014

BOJ Kuroda maintains positive view on economy

TOKYO (Reuters) – Bank of Japan Governor Haruhiko Kuroda on Wednesday affirmed its upbeat view of the economy, even as global financial markets wobble, stressing that growth will pick up around mid-year as the sting of a sales tax hike fades.

Price rises will broaden as the economy continues gradually to improve, Kuroda added, reiterating his view that Japan is making headway towards the central bank’s price goal of 2 percent inflation in about a year’s time.

Apr 13, 2014

Poland c.bank ‘preparing’ not ‘planning’ to use unconventional policies

WASHINGTON, April 13 (Reuters) – Poland’s central bank is
“preparing” to possibly use unconventional policy instruments if
need be, but not “planning” on it, its governor said on Sunday.

Marek Belka, speaking at an International Monetary Fund
event in Washington, said the instruments could be used to
intervene in different asset classes. Referring to
macroprudential policymaking, he said Poland needed to “brace
ourselves for the unthinkable.”

Apr 11, 2014

Japan urges G20 cooperation to ease geopolitical risks

WASHINGTON (Reuters) – Japan urged G20 countries to work closely together to alleviate geo-political uncertainties over Ukraine that may hurt global growth, Finance Minister Taro Aso said on Thursday.

Speaking to reporters after a G20 dinner session, Aso said he told counterparts that Japan welcomed efforts by the International Monetary Fund to quickly offer aid to Ukraine.

Apr 10, 2014

IMF says ECB must expand balance sheet, QE isn’t only option

WASHINGTON (Reuters) – The European Central Bank should expand its balance sheet further to stave off the risk of deflation, but options aren’t limited to quantitative easing-style purchases of government bonds, a senior International Monetary Fund official said.

Boosting liquidity provision to banks or buying private sector assets like asset-backed securities – even if the pool for them is small in Europe – can also help the region deal with dangerously low inflation, said Mahmood Pradhan, deputy director of the IMF’s European department.