Japan is facing significant economic shifts, with a notable plunge in household spending and discussions around monetary policy adjustments. January's data revealed a 6.3% decrease in household spending, largely attributed to a halt in auto production. Concurrently, the yen has seen a sharp rise against the dollar, reaching a 6-week high, fueled by speculation that the Bank of Japan (BOJ) may increase interest rates as early as this month. Reports suggest the BOJ is considering exiting negative interest rates in March, a move supported by various indicators, including the largest talk of wage growth since 1994, a weakening dollar due to poor US job data, and a significant narrowing of the China-Japan yield spread by 26 bps in the last 3 weeks. Additionally, the BOJ is contemplating the elimination of its yield curve control program, potentially replacing it with a strategy to pre-announce government bond purchases, before reaching the 2% inflation target, with discussions for a March/April hike. This comes as central bankers globally express optimism about overcoming inflation, with the Japanese government possibly declaring an official end to deflation.
The non-commercial #dollar long vs ten IMM futures and DXY held steady in the week to March 5 at $2.5 bn, with buying of EUR, GBP and not least JPY being offset by selling of CHF, AUD and CAD. Ahead of the end of week jump, the #yen short had been cut by 10% from a 7-yr high to… https://t.co/N3WPKJQ9tD
Japanese consumer spending in January fell by the most in 35 months, data has shown, although a government official blamed one-off factors and played down the impact on broader consumption trends. https://t.co/alwSEilTJf
Japan at Critical Juncture for Fully Overcoming Deflation https://t.co/if6nCTUcGh
Nikkei says BoJ discussing with MoF the possibility of (somehow) using this money to build a reserve to plug future bond losses. MoF is reluctant. Those losses would be *unrealized* so no biggie in reality but yes these paper losses and gains are big https://t.co/Q75EmiWJfr
Central bankers see victory within reach in push to tame inflation via @FT https://t.co/3E7WvwEjjI
US consumption will be lifted by the rebound in Auto Sales Sales of motor vehicles and parts plunged 4.6% in January and were responsible for over half the 1.2% month on month drop in goods spending - an outcome that was flagged early in February by Wards Automotive reporting a… https://t.co/uagjpbvgs0
have they considered not creating inflation in the first place? Central bankers see victory within reach in push to tame inflation https://t.co/7DQKqpkCXl
Japan gov't mulls declaring official end to deflation: sources https://t.co/yCCJah1W7s
The Bank of Japan is considering scrapping its yield curve control program and indicating in advance the amount of government bonds it plans to purchase, Jiji Press says https://t.co/8fs9s9aJ6O via @economics @erica_yokoyama
The Bank of Japan is considering scrapping its yield curve control program and instead indicating in advance the amount of government bonds it plans to purchase, Jiji Press says https://t.co/LMA1u0ehsK
*BOJ MULLS SCRAPPING YIELD CURVE CONTROL PROGRAM: JIJI
Central bankers see victory within reach in push to tame inflation https://t.co/swfZZ29uoY
Central Bankers See Victory Within Reach In Push To Tame Inflation - FT https://t.co/aZjAwu7Onm
Charts on crude net-positioning of non-commercial accounts (=managed money and other reportables) in Brent and WTI futures and options combined #OOTT latest value is March 5 https://t.co/glzJYAy0vu
CFTC POSITIONS IN THE WEEK OF MARCH 5TH https://t.co/oFxjes0mQk
🔴 CFTC POSITIONS IN THE WEEK OF MARCH 5TH
Money managers increased their net-length in WTI crude oil futures and options by 9,231 contracts to 183,960 in the week ending March 5 Long-only positions fell by 3,118 Short-only positions fell by 12,349 other reportables net-length rose by 4,507 CFTC #oott
Money managers reduced their net-length in Brent crude oil futures and options by 17,976 contracts to 236,805 in the week ending March 5 Long-only positions fell by 18,044 Short-only positions fell by 68 other reportables net-length fell by 9,311 ICE #oott
BIG Reasons why Japanese Yen is 🚀 1. BoJ Gov indicates rates could rise BEFORE 2% 🎯 2. Many BoJ members signal March/April hike?! 3. Biggest wage growth talk wins since 1994 4. Peak in US yields, weak US data Get details here 👉 https://t.co/aMuY2VfUuu https://t.co/aMuY2VfUuu
Yen Soars To 6-Week High On BoJ Hike-Hopes & 'Bad' US Jobs https://t.co/7lAs47xelr
*BOJ LEANING TOWARD EXITING NEGATIVE RATES IN MARCH: REUTERS China’s central bank governor says there’s room to cut banks’ reserve requirements China - Japan Yield Spread is now down 59 bps YTD and -26 in the last 3 weeks. https://t.co/X9s6Q4mxoK
Japan's Jan. household spending down 6.3% as output halt hits autos https://t.co/rNlM1mTP8s
Yen jumps on reports BoJ warming to rate rise, dollar eyes sharp weekly drop - Reuters https://t.co/RwuqHvUrUq
Dollar skid vs. yen continues as report says BOJ hike may come this month https://t.co/hIxWX8Hjn3
Japan's household spending plunge puts pressure on BOJ rate decision https://t.co/JL2egw0vdU https://t.co/4Xm78jBq2Y