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!

[HenryTo]

Deputy Governor of the Bank of Japan commenting that Japanese interest rates should not remain low for long. The BOJ is now expected to hike rates by 0.25% to 0.75% during its August meeting:

http://www.bloomberg.com/apps/news?pid=20601101&sid=ayq3rov59ldM&refer=japan

[HenryTo]

Normally should be a bullish event for both the currency and the bonds but the Moody's upgrade is coming in a little late, given that S&P has already upgraded Japan's sovereign debt on April 23:

Japanese govt bond ratings under review for possible upgrade - Moody's

http://www.forbes.com/markets/feeds/afx/2007/07/04/afx3883483.html

[rffrydr]

It doesn't look like japanese repatriation had much to do with it:

http://www.futuresource.com/charts/charts.jsp?s=SJBAU07
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

BOJ on hold again. They may hike in July's meeting, but most likely not until August. Whether they hike in July will depend on the quarterly Tankan survey to be released on July 2nd:

http://www.bloomberg.com/apps/news?pid=20601087&sid=avokkP1g3ODk&refer=home

[HenryTo]

Geoffrey, thanks for the links.

Japan surprises on wholesale prices. My guess is that a rate hike in August is now inevitable:
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Japan May wholesale prices up, rises spreading
Tue Jun 12, 2007 2:17 AM ET

By Yoko Nishikawa

TOKYO, June 12 (Reuters) - Japanese wholesale prices rose slightly more than expected in May from a year earlier, with increases spreading across more products, reaffirming expectations of an interest rate hike as early as August.

The corporate goods price index (CGPI), which tracks trends in wholesale prices, rose 2.2 percent in May from a year earlier, just above economists' median forecast of a 2.1 percent rise, data from the Bank of Japan showed on Tuesday.

It was the 39th straight month of annual gains and the May index hit 102.8, the highest level since January 2000 when the current calculation method began.

"The data is fairly strong when you look at the details," said Seiji Adachi, senior economist at Deutsche Securities.

He noted a 1.1 percent rise in prices of final goods -- a sign that companies are gradually passing higher wholesale prices on to consumers.

"The data itself may not directly affect the Bank of Japan's monetary policy, but it is considerably positive for them," Adachi said. "It is increasingly likely that the next interest rate hike will come in August-September."

The BOJ is widely expected to keep the key overnight call rate target unchanged at 0.5 percent at a two-day policy board meeting that ends on Friday.

Worries about a BOJ rate hike in the coming months, as well as a rapid rise in overseas yields, have prompted a sharp sell-off in Japanese government bonds over the past three weeks.

Yields on two-year notes, the most sensitive to changes in the monetary policy outlook, struck a decade high as nervous investors shunned bonds with shorter maturities.

Many market participants expect a rate hike to 0.75 percent as early as August. By then, they say, the BOJ could confirm that prices are on the rise, risks from external factors are waning and Japan's upper house election in July is out of the way.

A separate government consumer confidence survey showed that 53.5 percent of over 3,800 households polled expected prices to rise over the next year, up sharply from 45.6 percent in April, as prices of energy products rose.

BROADER GAINS

Compared with the previous month, the CGPI rose 0.5 percent in May, matching the market's consensus forecast.

Higher international commodity prices as well as rises in prices of chemicals, steel and nonferrous metals were behind the advance in wholesale prices in May. The weakness in the yen also continued to pushed up import prices.

After hitting a peak of 3.6 percent year-on-year growth in August and September last year on high energy costs, the pace of rises in the wholesale price index slowed as oil prices stabilised somewhat.

But a Bank of Japan official told reporters that prices of more than half of 905 products surveyed for the index rose in May for the first time under the current calculation method.

"The pace has slowed to 2.2 percent, but now rises are spreading to more products," he said.

Japan's consumer confidence index remained steady at 47.3 in May on an unadjusted basis, largely unchanged from 47.4 in April. A reading above 50 suggests consumer optimism, the government survey showed.

Despite continued falls in consumer prices and wages, recent data showed the jobless rate fell to a nine-year low and household spending grew stronger-than-expected in April, setting the stage for a rate hike later in the year.

BOJ officials say consumer prices will pick up in the long run on the back of a sustained recovery in the world's second-largest economy, which grew an annualised 3.3 percent in the first three months of this year.

[Geoffrey]

I think these are good.

http://www.forexfactory.com/calendar.php

http://fxtrade.oanda.com/resources/economic_calendar/ec.pdf

[rffrydr]

Their websites. Daily FX has one regular datapoint update with forward schedules.
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Today is the Tomorrow you worried about Yesterday!

[nodoodahs]

Where can one keep track of the schedules for various foreign central banks, specifically ECB and Japan?
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[HenryTo]

The issue of the Yen carry trade reaches a crescendo as Japanese baby boomers start getting in on the act.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aZHTbrY78gL0&refer=home

[rffrydr]

JGBs join party:


http://www.cnbc.com/id/15840232?video=364489256&play=1

BOJ "it's just a matter of when." "All of one percent."
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Suicides unravel LDP: pushes forward pension reform and takes pressure off Fukui.

http://www.cnbc.com/id/15840232?video=349227631&play=1

Surprise rate hike after election...
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Industrial Production, the granddaddy of japanese stats fails expectations--and the yen still up.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Definitely in a distribution pattern after three pushes higher, begging for an upthrust fakeout. The question is does this qualify?

For the very near future: Crude under 60 and I'm on it.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Interestingly, Euro Yen briefly spiked above the 164 level and is now trading back below that.

[diesel]

Thought about doubling up on my EUR/YEN short on this news but have decided to take a wait and see approach.



Chart shows good support here in addition to the price action.