Bank of Japan Ueda Bank of Japan Governor Ueda， who is the center of attention in the market， will be undergoing closed-session review in both the House of Representatives and the House of Councillors tomorrow， the 23rd．
Bank of Japan Governor Kazuo Ueda will face critical market scrutiny during a recess hearing in both the House of Representatives and the House of Councillors on the 23rd. The additional interest rate hike decided by the Bank of Japan at its July monetary policy meeting and the clear hawkish signal sent by Governor Ueda are believed to have led to the turmoil in global financial markets earlier this month. The House of Representatives’ Financial and Monetary Affairs Committee will hear President Ueda’s opinions from 9:30 a.m., and the House of Councillors’ Financial and Monetary Affairs Committee will hear his opinions from 1 p.m. Each tour is scheduled to take two and a half hours. The unusual review, which is being held while the Diet is in recess, was requested by lawmakers seeking an explanation from the Bank of Japan. The Bank of Japan’s hawkish signals helped wipe out as much as $6.4 trillion from global stock markets this month, including the Nikkei average’s biggest ever drop. The stock market has since narrowed its decline, with the S&P 500 index once again approaching its July peak and the Nikkei average recovering about 20% from its August low. The hearing will be held just a few hours before Federal Reserve Chairman Jerome Powell speaks at the Jackson Hole forex market conference, so Ueda is likely to refrain from making any newsworthy comments and try to avoid causing as much volatility as possible. Bank of Japan watchers say the governor is likely to avoid making any policy commitments and seek to reassure banks that interest rates will not be raised at a time of financial market volatility. “Governor Ueda’s ultimate goal is probably not to cause any shocks,” said Ueno Tsuyoshi, a senior economist at the Nikkei Research Institute. “The reason why the closed-session review is being held in the first place is because the Bank of Japan’s hawkish message was followed by turmoil in global financial markets, so it would be terrible if they were to do anything that would cause market turmoil at this point,” he said. Hawkish signal from Bank of Japan sends shockwaves through markets | Japanese stocks fluctuate wildly, yen surges Bank of Japan Deputy Governor Makoto Uchida tried to ease market fears on the 7th by saying that interest rates would not be raised amid volatility in financial markets. He also expressed the view that it is necessary to continue monetary easing at current levels firmly for the “immediate future.” Although the market has calmed down somewhat since this statement, the differences between the governor and deputy governor are causing anxiety in the market. An important point for Bank of Japan watchers to keep a close eye on is whether there will be any change in the nuance of the words used by Governor Ueda. Many Bank of Japan watchers still believe there is a chance of another rate hike this year, citing the view that market turmoil will not last too long. UBS Securities predicts the next rate hike will be in October. Meanwhile, Nomura Securities and Deutsche Securities expect it to be December. Barclays last week brought forward its deadline from April to January next year. A delicate balance: Governor Ueda will likely want to avoid making overly dovish statements due to concerns that the yen may continue to weaken. Heading into the July meeting, calls for an interest rate hike had been growing from politicians and business executives amid the weakening yen. Ueno of Nikko Research Institute pointed out, “If they clearly take a hawkish stance, the yen will appreciate and stocks will plummet.” “If they send out a clearly dovish signal, there is a risk that the yen will weaken significantly, rekindling various concerns arising from the weak yen and returning us to the situation we were in before the July meeting,” he said. Within hours, market attention would shift from Ueda to Fed Chairman Powell, who is speaking at Jackson Hole and whose comments will be scrutinized for clues about future U.S. monetary policy. Shohei Omori, chief desk strategist at Mizuho Securities’ financial markets department, predicted that “the market will see volatile price movements” on the 23rd. While Governor Ueda is likely to echo Deputy Governor Uchida’s comments, he said, “There is a possibility that the market will be misled into giving answers that are misleading or that are perceived as convenient for the market, such as a hawkish stance.” (Excerpt) Full source.
>>1 They should openly declare an interest rate hike in the Diet and move toward a stronger yen. The stronger yen has also boosted Kishida’s approval rating. The LDP needs to make the yen stronger to win the Lower House election.
>>1 The reason prices are so high in Japan right now is because the US and Europe are giving out too many subsidies during the COVID-19 pandemic, leading to abnormal inflation that is now spreading to Japan. Inflation cannot be stopped by Japan alone because it is caused by factors outside of Japan. As a major importing country, prices in Japan will be dragged down by import prices and will eventually converge to a single point (similar to prices in Europe and the US), but the only way to get there is to approach it from above or from below. Japan has been in a state of deflation, which has kept price increases more subdued than in Europe and the US, but the overall rate of price increase has not yet reached those of Europe and the US. The reason why the yen is weak now is because America is raising interest rates to stave off inflation in the country, and the dollar is being bought in response to the higher interest rates. If inflation in the United States subsides, the United States will also begin to lower interest rates, and the weak yen will be resolved. If deflationary Japan were to raise interest rates, it would suffer the double whammy of a recession caused by slowing consumption and rising prices.
It would be hilarious if we see another crash bigger than Black Monday. I want the ruling and opposition party politicians to ask crazy questions and draw out Ueda’s abusive comments.
If we try to make the yen stronger without raising interest rates, then forcing the yen to appreciate by raising interest rates is something even an elementary school student could do. Why not try it out at Kidzania too?
The other day’s comment was just a light jab to see how things would go. I guess it was meant to be a light greeting. But even though it was meant to be a light jab, the market panicked and people rushed to return the yen. How many people died from that jab?
>>22 The Ministry of Finance, the Bank of Japan, and their dog, the Nikkei Shimbun, want to do just that, but if you look at the charts, it’s obvious that stock prices have been crashing since the beginning of this month, so the only thing we can say is that the Bank of Japan’s interest rate hike was the beginning of Black Monday.
The economy is a living thing that is driven by emotions, and there are many things that cannot be explained by mathematical formulas, though Ueda may not understand this.
If stock prices fall, the Bank of Japan will also have unrealized losses. They were trying to encourage investment and push it onto NISA members, but Ueda’s careless remarks have left NISA members dying in droves, and the idea that investment is dangerous has spread again. What do these people in this country want to do?
Strong yen supporters: Low-life scum who can’t get a raise, people on welfare, the elderly, and Koreans living in Japan who earn money in yen and send it back in foreign currency. Weak yen supporters: Ordinary people and young people who benefit from growth.
The horror of Haruhiko Kuroda’s unprecedented monetary easing. Just trying to exit the monetary policy a little has generated this kind of reaction. Monetary easing without considering an exit policy is frightening.
Which fool was the BOJ governor who only watched Japan while America and Europe eased their monetary policies and did nothing? If the Democratic Party government lasted another three years, Japan would collapse, you idiot.
It would be one thing to raise interest rates when the US is in a rate-raising phase, but it would be foolish to raise interest rates when the US is currently in a rate-cutting phase.
99.7% of businesses are small to medium sized, so if interest rates are forced to rise and the yen strengthens, and prices don’t fall, Japanese citizens other than high-ranking officials and civil servants are completely finished. The Bank of Japan Governor’s Kamehameha blast is extremely destructive lol.
The only way to end the extraordinary monetary easing is to either live with it until we die, or reset with hyperinflation or default. Even if we exit, it will take decades for it to disappear.
The world was probably wondering why the Bank of Japan wasn’t raising interest rates lol And that put them under surveillance as a currency manipulator If they were to be blamed, they would be told to raise it even more, saying that 0.25 is too low.
>>67 A strong yen leads to lower corporate profits and lower personal assets → lower domestic demand Debt leads to lower capital investment → lower domestic demand As a result, there is no growth, and once all available assets are used up, Japan is finished.
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