No end in sight for cheap money in Japan

Analysts broadly agree that Japan’s central bank is unlikely to raise interest rates at its monetary policy committee meeting this week. Economic data showed real GDP growth was negative in the first three months of the year, limiting the capacity of the central bank to normalise rates. “In Tokyo, there is not even the whiff of a conversation about tightening, especially after disappointing first quarter data,” said Christopher Smart, head of global macroeconomic and geopolitical research at Barings. “There is more hope for the second quarter, but the Bank of Japan will remain firmly in accommodation mode. This may keep the cost of money low in Japan, but raise the risks of global monetary policy that are increasingly at odds.” Katsunori Kitakura, lead strategist at Sumi Trust, a Japanese asset manager, said few anticipate that Japan will meet its target of 2% inflation this year. “Governor Kuroda lacks confidence in the 2% inflation goal and in the last monetary policy meeting removed the target date,” he said, adding that the normalisation of monetary policy was “not on the cards at this meeting”. ©2018 funds europe

Executive Interviews

Interview: Money needs a place to go

Mar 11, 2019

Peng Fei, chief investment officer at Wanwei Asset Management, tells Romil Patel about allocating capital across risk factors when asset performance is uncertain and unpredictable.

INTERVIEW: Giving peace a chance

Jan 11, 2019

As US-China tensions escalated in 2018, the leaders of the two economies met in Buenos Aires to agree a truce. Aidan Yao, senior emerging Asia economist at Axa Investment Managers, talks to Romil...


Singapore roundtable: A money magnet

Mar 11, 2019

Our panel discussed why the Singapore Variable Capital Company makes them bullish, what gives the onshore jurisdiction an offshore feel and “blood on the streets” from China’s slowdown. Chaired by Romil Patel in Singapore.


Jan 11, 2019

Changes to regulation, US-Sino trade tensions and further steps by China to open its capital markets were some of the topics discussed by our panel. Chaired by Romil Patel in Hong Kong.