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

Executive interview: The man who made Aberdeen

Mar 04, 2021

Martin Gilbert reflects on nearly four decades as Aberdeen CEO, including what he brought to the company, his regrets at not entering into private markets earlier, and passing like ships in the...

Executive interview: Staying agile on the pandemic plan

Nov 05, 2020

Terry Pan, chief executive for Greater China, southeast Asia and Korea at Invesco Asia Pacific, tells us about managing a business during Covid-19, opportunities on the continent and US-China...


Hong Kong roundtable: Increasing China’s prominence as an asset class

Mar 04, 2021

Our line-up of experts in Hong Kong considers the importance of fixed income ETFs, sustainability and the prospects of increasing China in the indices. Chaired by Romil Patel.

Roundtable: ‘What’s priced in versus what surprises’

Jan 04, 2021

As we head into 2021, our panel of experts in Singapore pore over the key risks that are not fully priced in, the impact of the incoming Biden administration on Asia and the dominant investment theme that is China. Chaired by Romil Patel.