BOJ's success may hinge on fate of 'kamikaze' Trump rally
Japan Times -- Dec 27
The Bank of Japan, which has given up on achieving its 2 percent inflation goal by printing more money, is expected to fret over the fate of the "Trump rally" in 2017.

If U.S. Treasury yields continue to rise and the dollar extends gains against the yen, the BOJ might begin tapering its aggressive monetary easing. But once the yen turns upward, the central bank could be forced to implement additional easing once again, just like it’s done for the past several years.

“The BOJ wants to carefully assess sustainability of the rise in U.S. interest rates and the yen’s weakening trend since the U.S. presidential election,” said Naohiko Baba, chief economist at Goldman Sachs Japan Co.

2016 was turbulent for the BOJ. The central bank decided in January to apply a negative interest rate of 0.1 percent on some reserves held by commercial banks. In September, the bank shifted its policy target to “yield curve control” instead of boosting asset purchases.

At its two-day policy meeting through Dec. 20, the first since the U.S. election, the BOJ kept its 10-year government debt yield target unchanged at around zero percent, as well as its negative interest rate policy.

BOJ Gov. Haruhiko Kuroda denied the possibility of raising the yield target anytime soon, despite the continued rise of long-term interest rates after Republican Donald Trump’s victory.

“Promoting powerful monetary easing under the current policy is most appropriate” for now to realize 2 percent inflation, Kuroda said at a news conference after the meeting.

Should the BOJ successfully curb increases in government bond yields, the wider interest rate gap between Japan and the United States would weaken the yen further against the dollar, as the Federal Reserve is set to continue tightening monetary policy in line with economic recovery.

Expectations for Trump’s economic policies, centering on infrastructure spending and tax cuts, may also pump up stock prices, slashing demand for U.S. Treasuries and sending yields higher. Debt prices move inversely to yields.

A falling yen would push up import prices in Japan, which could help the BOJ attain its inflation goal, although core consumer prices, excluding volatile fresh food prices, were mostly stuck in negative territory during 2016.

News source: Japan Times
Mar 25
A judge sentenced a self-described shaman to a prison term on Friday in the murder of a diabetic boy by telling his parents not give him insulin since it is "poison." (tokyoreporter.com)
Mar 25
A court in Japan has sentenced a 21-year-old former university student to life imprisonment for murdering an elderly woman and poisoning classmates when she was a minor. (NHK)
Mar 25
STREET FOOD! We're back for more in one of Japan's most traditional cities, Nara. What was once Japan's capitol is now a place loaded with delicious street food for humans and deer alike. So, what's Nara got to offer? I hope you're hungry! (ONLY in JAPAN )
Mar 25
Police in Imakane, Hokkaido, said Thursday that the body of a 74-year-old woman was discovered in a freezer at her home. (Japan Today)
Mar 25
The Meteorological Agency on Friday warned that an underwater volcano about 400 km south of Tokyo could erupt soon, spurring the Japan Coast Guard to issue an alert to ships in the area. (Japan Times)
Mar 25
Japan's Liberal Democratic Party on Friday submitted a record of email exchanges in which Akie Abe, Prime Minister Shinzo Abe's wife, denies her alleged payment of one million yen to an embattled school operator. (Jiji)
Mar 25
Japanese Defense Minister Tomomi Inada ordered the Ground Self-Defense Force on Friday to withdraw its engineering troops taking part in a U.N. peacekeeping mission in South Sudan by the end of May. (Jiji)
Mar 25
New textbooks authorized for use in Japan's senior high schools from April next year contain more descriptions on foreign and defense policies undertaken by Prime Minister Shinzo Abe's government, such as the ability to engage in collective self-defense, according to the results of the education ministry's latest textbook screening disclosed Friday. (Japan Today)
Mar 25
The Tokyo District Court on Friday found a former employee of business newspaper publisher Nikkei Inc. guilty of intercepting the email of female celebrities. (Japan Times)
Mar 25
A 55-year-old woman has been arrested for beating her husband to death at their residence in Yokosuka City, Kanagawa Prefecture, police said Friday. (Japan Today)