Bloomberg had this piece up earlier (link for more), citing ‘people familiar:
- The BOJ doesn’t allow home computers to connect to its network for conducting asset purchases and other market transactions
- Three firms (at least) have asked the BOJ whether traders can participate in its operations from outside the office
- BOJ-Net infrastructure is used for yen transactions daily, connected via dedicated cables to computers at dozens of financial firms so they can trade assets with the central bank or buy bonds from the government
- BOJ is concerned about cybersecurity risk.
The hot new toy for summer probably won’t be keenly sought after amongst BOJ counterparties:
BOJ governor, Haruhiko Kuroda, begins his press conference
- But Japanese economy remains in an extremely severe siituation
- Pace of recovery to only be moderate
- Inflation is likely to be negative for the time being
- Future economic developments remain extremely unclear
- Risks are tilted to the downside for prices, economic growth
- BOJ won’t hesitate to ease further if needed
- Will continue to support corporate financing, markets
Kuroda is still maintaining a more subdued take on the economic situation but that is hardly a surprise. The recent economic data from Japan have been rather poor and a possible virus resurgence only adds to more risks surrounding the outlook.
But Kuroda stands firm in assuring that the BOJ policies since March are having an impact, though I’m sure they pretty much lucked out on this one with the Fed and ECB doing most of the heavy lifting to appease financial risks in the market for the most part.
BOJ to hold an unscheduled monetary policy meeting this week
The meeting will take place at 0000 GMT on 22 May (this Friday). The BOJ says that the meeting is to discuss new measures to provide funds to financial institutions, following up on instructions by governor Kuroda from the 27 April meeting.
Their next policy meeting was supposed to be on 16 June but Kuroda had already hinted that they were looking to do something like this before that meeting here
So, this is merely to follow up on that as they will introduce a funding scheme to aid the financial system and inject more liquidity. But the sudden call here isn’t going to be all too comforting and it’ll prompt questions on if there are any banks in trouble.
Bank of Japan monetary policy meeting for January 2020 has concluded
As expected, policy unchanged:
- keeps monetary policy steady
- maintains short-term interest rate target at -0.1%
- maintains 10-year JGB yield target around 0%
- maintains forward guidance on interest rates, says they will remain at current or lower levels for as long as needed to guard against risk momentum for hitting price goal may be lost
I’ll have more on this separately
The monthly Reuters Tankan is more timely than the quarterly report of the same name from the BOJ.
- January manufacturers’ sentiment index comes in at -6 (unchanged from Dec)
- Service-sector index +14 in January vs. flat vs Dec
- Manufacturers’ mood seen up ahead, service sector down
Pessimism amongst Japanese manufacturers persisted in January, usual suspects cited:
- China-U.S. trade tension
- sluggish global demand
Looking ahead though, some believed conditions will improve in the next few months
Service-sector outlook sees 13 in April (slight fall)
Bank of Japan survey is of manufacturing and service companies designed to assess business conditions in Japan
The main Q4 results:
Large Manufacturing Index: 0
Large Non-Manufacturing Index 20, improving!
Large Manufacturing Outlook 0
Large Non-Manufacturing Outlook 18