News

Bank of Japan Governor Ueda says keeping low rates even when underlying inflation is accelerating could result in a situation where we would be forced to hike rapidly.

Also:

• FX rates should move stably reflecting fundamentals

Ueda spoke earlier:

• Bank of Japan Governor Ueda says can’t tell right now how tariffs will impact prices
• Bank of Japan Governor Ueda says Japan’s real interest rate remains very low

As did a fellow board member:

• BoJ’s Nakagawa says if economic and inflation targets hit, will continue to raise rates

USD/JPY rose earlier:

• The weaker yen today – U.S./Japan tariff talks steering clear of FX concerns cited

This article was written by Eamonn Sheridan at www.forexlive.com.

BoJ board member Junko Nakagawa cited US trade policy as one of the most significant risks to Japan’s economic outlook. In a speech, she noted that higher US tariffs could directly damage Japanese corporate activity, pressuring exports, production, sales, capital expenditure, and profitability. Nakagawa also noted the potential for broader spillover effects, including weakened business […]

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Japan’s exports rose 3.9% yoy in March to JPY 9.85T, below the expected 4.5% yoy gain. Shipments to the US rose 3.1% yoy overall, boosted by strong gains in electronic parts (+35.8%), pharmaceuticals (+29.7%), and autos (+4.1%). However, this was offset by weakness in China, where exports fell -4.8% yoy. On the import side, inbound […]

The post Japan’s exports grow 3.9% yoy in March, imports up 2.0% yoy appeared first on Action Forex.

The yen declined against other G-10 and Asian currencies after reports confirmed that foreign exchange issues were not discussed in Wednesday’s U.S.-Japan tariff talks.

• Japan economy minister Akazawa says agreed to hold a 2nd meeting with US this month

This helped ease market worries that the Trump administration might target Japan’s currency policies.

Despite this relief, trade uncertainty remains elevated.

• Mizuho Securities said Japan is making “great progress” in negotiations, but the start of formal talks has heightened market sensitivity to a potential “deal or no deal” outcome, increasing volatility.

This article was written by Eamonn Sheridan at www.forexlive.com.

Earlier today we had the official CPI data from NZ:

• New Zealand Q1 CPI +2.5% y/y (expected +2.3%) & +0.9% q/q (expected +0.7%)

From the Reserve Bank of New Zealand now, its model falling below Q4 and under the top of its 3% band:

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Reserve Bank of New Zealand’s sectoral factor model of inflation, its preferred measure.

• The model is based on the idea that inflation in each sector of the economy is influenced by a common set of underlying factors or “factors” such as changes in interest rates, exchange rates, and commodity prices.
• The model describes how inflation in each sector of the economy is affected by the underlying factors. Estimates are derived from data on past inflation rates and other relevant indicators and are used to generate forecasts for future inflation in each sector.
• The RBNZ sectoral factor model of inflation is particularly useful because it allows the central bank to identify the sources of inflationary pressures in different parts of the economy. For example, if inflation is rising rapidly in the housing sector, the RBNZ can use the model to determine whether this is due to changes in interest rates or other factors specific to the housing market. By understanding the sources of inflationary pressures, the RBNZ can adjust its monetary policy to target inflation effectively and achieve its inflation targets.

This article was written by Eamonn Sheridan at www.forexlive.com.