JAPAN

[rffrydr]

Core rate up .5%; 3 in a row:

"Mitsubishi UFJ Securities senior strategist Naomi Hasegawa said remarks this morning by Prime Minister Junichi Koizumi fueled conjecture that the central bank will soon end its present policy.

'[Changes in] consumer prices are coming in above zero and we are seeing signs of getting out of deflation,' Koizumi told a parliamentary committee.

His comments were his most positive yet on recent indications that the economy is winning its battle with falling consumer prices. Previously, Koizumi had insisted that it was too soon to say that the economy was coming out of deflation."


Bonds and stocks were short going in. End-of-day showed resiliency, (complaceny?)

Hey Henry, Devil's advocate: with Japanese debt at a Godzilla-sized 160% GDP on the worlds fastest aging population (and most afraid of foreign workers) do they have any choice BUT to reflate their way out? And politicians want a decade for "reforms."

An end to quantiative easing may be announced at the end of Japanese Fiscal Year--but this could take a long, long time to play out. Markets 1st "verdict."
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Today is the Tomorrow you worried about Yesterday!

[Goodfella]

if it sinks to 10800 on dow i'll prob close some there, dont wanna be too greedy

[Goodfella]

we might even see 1230's on the spx today!

what was it bill was saying at the top " a new bull market" some chianti some fava beans.......


LOL!

[rffrydr]

YOY not looking so good: down 500 one day after breaking 06 starting gate.

Time to take "positive action" and get negative.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Nikkei investors now underwater on the year.

http://www.futuresource.com/charts/charts.jsp?s=SNIM06

YOY still looking good.

[HenryTo]

Latest from Japan: The Bank of Japan continues to absorb excess liquidity, but has made it clear that they intend to keep its zero interest rate policy for sometime. I also think the BoJ also stands ready to intervene at any time should they believe the Japanese bond or equity markets may be in peril.
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BOJ's Muto Sees Low Interest Rates for `Some Time' (Update2)
June 5 (Bloomberg) -- The Bank of Japan can maintain low interest rates for ``some time,'' and future adjustments will be gradual, Bank of Japan Deputy Governor Toshiro Muto said.

``Accommodative financial conditions resulting from very low interest rates can be maintained for some time,'' Muto, 62, said at the International Monetary Conference in Washington. The BOJ will ``adjust the level of interest rates gradually'' as it gauges the prospects for inflation and economic growth in coming months, he said.

The Bank of Japan ended its policy of pumping cash into the economy on March 9, and has since drained excess cash from the banking system, a precursor to raising interest rates for the first time since August 2000. Central Bank Governor Toshihiko Fukui repeated last week the bank doesn't have any predetermined period of raising interest rates and its judgment depends on upcoming data of prices and economy.

The Japanese economy is likely ``to remain on a balanced and sustained growth path,'' Muto said today. ``All in all, our outlook is something benign.''

The optimistic outlook won't prompt the Japanese central bank to drop its guard on inflation, Muto said. A jump in business investment presents an ``upside'' risk to growth that may later cause inflation to pick up, he said.

Business Investment

``Acceleration in investment will lift growth in the very short time, but the backlash may have serious implications,'' he said. ``We may see substantial fluctuation in the rate of inflation as well. Those are still distant risks, nevertheless, a central banker will have to be cautious of the risks'' in the economy.

Muto rejected criticism that the bank has been hesitant in removing some of the policy accommodation that the bank implemented to combat deflation. He said the bank aims to keep interest rates near zero and investors shouldn't pay too much attention to day-to-day fluctuations in its money market operations.

The Bank of Japan has drained excess liquidity from the banking system as the bank unwinds its five-year-old policy of fighting deflation. Reserves it makes available to lenders have declined to 14.2 trillion yen ($127 billion) as of June 2, from 32.1 trillion yen on March 9. Fukui has said the bank won't increase rates at least until reserves falls to the required minimum, which economists estimate at between 6 trillion yen and 10 trillion yen.

Muto also said individual economies need to work together to solve imbalances in growth and savings while downplaying the role the currency adjustments would play in such a process.

Currency Realignment

``A quick fix of global imbalances through large-scale realignment of exchange rates is an illusion,'' Muto said. ``I believe the time has come to say goodbye to the fixation with'' large-scale currency realignments because ``extreme movements'' in currency values are more likely to destabilize economies, he said.

Muto became the central bank's deputy governor in 2003 after serving for Japan's Ministry of Finance for almost 40 years. He was the vice finance minister, the ministry's top bureaucrat, before retiring the ministry.

[rffrydr]

Monetary Base down 15% Tighening well under way whether they like it or not. --which is less than expectations. And...

BOJ slowed its process of absorbing excess liquidity by reducing the balance of current account deposits toward a minimum required level.

They're starting not to like it.

[HenryTo]

rffrydr,

No, sorry, I don't have a subscription or a relationship with Dismal Scientist. But I agree - especially given their recent actions of injecting liquidity and the pressure from the MOF to not to hike. Deflation is still prevalent in the services market right now, and the latest downdraft in the Nikkei will convince them to "pause" as well.

In other news, Japan's population declined for the first time (since 1945) last year:

http://www.cnn.com/2006/HEALTH/parenting/06/01/japan.population.reut/index.html

[Goodfella]

slaves of the US consumer, they got the rough end of the globalistion stick



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Japanese still dying from overwork, suicide despite recovery Thursday June 1, 08:52 AM

TOKYO (AFP) - A record number of Japanese became seriously ill or died due to overwork last year while suicides topped 30,000 for an eighth straight year despite the economic recovery, the government said.

Some 330 workers fell severely ill or died because of overwork in the fiscal year to March, Japan's worst figure on record and up 12.2 percent from the previous year, the Ministry of Health, Welfare and Labour said.

Of the total, 157 people died, many from stroke or heart attack.

The

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number of applications for worker compensation due to suspected disease or death from overwork also hit a record high 869 in the same period, of which about 60 percent were rejected, the ministry said.

Meanwhile police reported the number of suicides in Japan reached 32,552 cases in 2005, with health and financial worries most frequently pushing people to kill themselves.

The figure was up by 0.7 percent or 227 cases from 2004, with men accounting for 23,540, or more than 70 percent, according to the National Police Agency.

Health problems were cited as the main motivating factor in 15,014 or 46.1 percent of the cases, following by concerns related to the economy and livelihood which were cited in 7,756 cases.

Japan has the highest suicide rate in the industrialized world, according to the World Health Organization.

The Japanese government has campaigned for years to stop death from overwork, a phenomenon that grew so common during Japan's post-World War II economic miracle that it has its own word, "karoshi."

Chikanobu Okamura, a lawyer who has handled a number of lawsuits linked to overwork, said the growing use of part-time workers was putting extra pressure on full-time employees to spent more time on the job.

"Although the economy has been recovering, workers have not reaped the dividends in terms of labour conditions," said Okamura.

"An extraordinarily heavy workload is required for permanent full-time workers as the use of part-time workers has been increasing," he said.

Japan's unemployment rate is at a seven-year low of 4.1 percent.

However, the proportion of workers who are employed on a permanent basis decreased to 86.0 percent in 2005 from 89.6 percent 1995.

The average number of hours worked each month declined 0.1 percent in April from a year earlier to 155.8, according to labor ministry figures.

[rffrydr]

Yo, Henry:

Contrarian article on Dismal Scientist that BOJ should "pause" before doing anything. Can you post?????

[rffrydr]

No support here:

http://www.forbes.com/markets/feeds/afx/2006/05/29/afx2779306.html

Spending in Japan for the past several years has come from a drawdown in savings. Makes me wonder what kind of fire there is to light here.

[HenryTo]

Bank of Japan injected an additional 1.5 trillion Yen ($13 billion) on Monday - most probably in response to the latest rise in ST rates and the continuing linger of deflation.

This should also help the JGB stay strong: http://www.futuresource.com/charts/charts.jsp?s=LJB&o=&a=D&z=610x300&d=medium&b=bar&st=

Stay tuned.

[rffrydr]

Injects 500 billion Yen in reserves to counter spike in shorter rates. Looks to be readying for intervention, next month or July?

But this is starting to work, coming of channel despite it, the modest intervention and the heavy participation in their bond auction today.

http://www.futuresource.com/charts/charts.jsp?s=EUJYY

[rffrydr]

The wait goes on. PBOC also dragging. Supportive.

[rffrydr]

BOJ meeting; now. Expectations are high yet, as always in Japan, delivery is slow:

http://news.yahoo.com/s/ft/20060518/bs_ft/fto051720062132168555

http://www.bloomberg.com/apps/news?pid=10000101&sid=a9e8I2U2tmIs


Note how, like in the US twice before, CPI measures change, and as always, "for the better."

ps Canada CPI down yesterday, AUS up.

[rffrydr]

Money flows today approx 4 billion to international equities 1 billion out US; meanwhile:

http://www.futuresource.com/charts/charts.jsp?s=SNIK06

And this with Japan continuing to talk soft. BOJ minutes and statements last night cast some doubt on a global co-ordinated shift in account balances--but's it's only a week since Hu came to town. And PBOJ already slating for next raise.
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Today is the Tomorrow you worried about Yesterday!