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The interest on Yen, isn't welcomed by Abenomics, since it will definitely push up Yen. Our S$, is no longer the safe haven...
Yen adds to gains as investors run for cover
12 Feb 2016 06:49
[NEW YORK] The Japanese yen surged again on Thursday as traders spooked by turbulence in financial markets continued to plow into the safe haven.
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AFP
Source: Business Times Breaking News
The confidence level is low, even among unions...
Japan automaker unions' underwhelming pay demands challenge Abenomics
17 Feb 2016 16:04
[TOKYO] Japan's automaker labour unions are reducing their demands for pay rises for the next fiscal year from amounts sought the previous year, a move that could hamper the Abe government's efforts to stoke demand and defeat deflation.
The annual "shunto" wage talks are seen as crucial for the ultimate success of Prime Minister Shinzo Abe's aim to generate virtuous growth led by higher incomes and business investment.
The unions' modest demand underscores Abe's struggle in pulling Japan out of two decades of deflation and stagnation, with the global stock market rout and yen gains since the start of this year giving firms a perfect excuse to forgo wage hikes.
The labour union of auto giant Toyota Motor Corp, which sets the tone for annual wage talks across Japan, is seeking a 3,000 yen (US$26.31) increase in monthly base pay, half of what was sought last year.
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REUTERS
Source: Business Times Breaking News
Finally the start to formally discuss the 3rd Arrow...
Japan ruling party to tackle 'taboo' of expanding foreign labour force
03 Mar 2016 14:59
[TOKYO] Japan's ruling party kicks off a debate this month on whether to expand the pool of foreign workers to cope with a greying, shrinking population, challenging a longstanding "taboo" on immigration, the head of a new party panel said on Thursday (March 3).
With demand for labour at its highest in 24 years, firms such as Subaru car maker Fuji Heavy Industries Ltd are turning to what is effectively a system of back-door immigration.
But rather than rely on immigration, Prime Minister Shinzo Abe wants to focus on drawing more women and elderly into the workforce to fill the gaps, and has made raising Japan's rock-bottom birth rate a priority.
"The question is how to ensure workers," Yoshio Kimura, a member of Abe's Liberal Democratic Party in parliament's upper house, told Reuters.
"The biggest problem for Japan's economic growth is the shrinking population."
The only way to ensure growth was to increase the size of the workforce, Mr Kimura said in an interview, adding that monetary and fiscal policies were reaching the limit of their capacity to spur growth
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REUTERS
Source: Business Times Breaking News
The negative interest rate policy, is controversial, even in the BOJ board...
Japan PM Abe taps economist Sakurai to replace BOJ dissenter on board
04 Mar 2016 15:13
[TOKYO] The Abe administration nominated an economist with links to aides to the prime minister as a replacement for a Bank of Japan board member who in January opposed the adoption of negative interest rates.
Prime Minister Shinzo Abe opted against giving another term to Sayuri Shirai, 53, when her current one expires March 31. She was on the losing side of the BOJ's 5-4 vote in January to implement a negative benchmark rate for the first time. She had voted with governor Haruhiko Kuroda to expand asset purchases in 2013 and again in 2014.
Makoto Sakurai, an international finance researcher, will take the job after winning confirmation in parliament, where Mr Abe's ruling coalition has majorities in both houses.
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BLOOMBERG
Source: Business Times Breaking News
Latest update on Abenomics...
Japan's Abe suggests higher chance of tax hike delay
TOKYO (March 9): Japanese Prime Minister Shinzo Abe said on Wednesday that whether to proceed with a sales tax hike next April would be a "political decision," suggesting that the chance of delaying it may have increased given overseas headwinds hurting the economy.
Mr Abe has already delayed the tax increase once, and has long said he would only delay it again if Japan were to suffer a shock on the magnitude of the 2008 collapse of US investment bank Lehman Brothers.
More recently, though, he said a global economic contraction could also force a rethink and that it would be meaningless to press ahead if it crimped tax revenue by choking the economy.
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http://www.theedgemarkets.com/sg/article...hike-delay
Money still flow into deposit accounts, with almost zero rate. Banks didn't charge because they still want the customers. An interesting outcome of the negative rate, may be only in Japan...
BOJ negative rate move backfires
TOKYO (March 15): It's a strange world when bank accounts earning almost no interest are one of the most attractive investments around.
Despite the Bank of Japan's efforts to spur risk-taking with negative rates, cash is flowing out of funds targeting bills and commercial paper in favour of 0.001% savings plans, according to Deutsche Bank and Monex Group. Eleven money-market funds stopped accepting new investment in February as banker association data showed deposits climbed almost 6%.
The influx of cash is causing headaches for lenders that either have to pay to park reserves at the central bank or invest in a government bond market with negative yields in maturities as long as 10 years. It also undermines Prime Minister Shinzo Abe's strategy of encouraging companies and households to invest more of their cash, a key part of his goal to reflate the world's third-largest economy.
"This is investment to savings - the exact opposite of what the government has been trying to promote," said Nana Otsuki, chief analyst at Monex, a Tokyo-based online securities firm. "The banks really don't want excessive amounts of deposits that they can't invest, but they do want the customers."
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http://www.theedgemarkets.com/sg/article...-backfires
How far can the negative rate goes?
Kuroda says BOJ has room to cut rates to around -0.5%
TOKYO (March 16): Bank of Japan Governor Haruhiko Kuroda said there is room to slash interest rates to around minus 0.5%, countering a growing suspicion that public criticism over January's decision to adopt negative rates will prevent him from pursuing the policy.
Speaking in parliament, Mr Kuroda said he cannot indicate which policy tools the BOJ would use in case it decided to expand stimulus again as the decision would depend on economic conditions at the time.
"Of course, there's a possibility that we will decide to cut interest rates further," Mr Kuroda said. "Theoretically, there is room to do so," he said, when asked by an opposition lawmaker whether the BOJ could cut rates to around minus 0.5%.
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http://www.theedgemarkets.com/sg/article...-around-05
A pretty interesting battle between BOJ and the market.
Five fault lines show Japan bond market close to breaking point
TOKYO (March 24): Signs of stress are multiplying in Japan's government bond market, which is crumbling under pressure from the central bank's unprecedented asset-purchase program and negative interest rates.
Bank of Japan Governor Haruhiko Kuroda has repeatedly said his policies are having the desired effect on markets, including suppressing JGB yields.
His success is driving frenzied demand for longer-dated notes as investors avoid the negative yields offered on maturities up to 10 years.
And as buyers hang on to debt offering interest returns, the BOJ is finding it harder to press on with bond purchases of as much as 12 trillion yen ($145.6 billion) a month, sparking sudden price swings leading to yield curve inversions that have nothing to do with economic fundamentals.
"We hold a lot, and we're not selling," said Yoshiyuki Suzuki, the head of fixed income in Tokyo at Fukoku Mutual Life Insurance, which has US$59 billion in assets.
"We can get interest income. If we sell, there are no good alternatives."
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http://www.theedgemarkets.com/sg/article...king-point
I have two main worries about investing in Japan:
1) 70% chance of major earthquake in Tokyo in the next 4 or 30 years (4 years=according to Tokyo University. 30 years=according to Japan gov)
2) Artificially low interest rates caused by Japan government's QE. What happens if BOJ stop buying JGBs? (See below article)
Japan's negative rates a looming headache for central bank
Driving interest rates below zero, the Bank of Japan has turned a comatose government bond market into an enormous free-for-all, complicating the central bank's own efforts to kick-start growth and end deflation.
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http://www.channelnewsasia.com/news/busi...41790.html
Quote:As the BOJ's dominance distorts bond market functions and dries up liquidity, the central bank could have a hard time tapering its buying binge when it eventually chooses to exit its "quantitative and qualitative easing" program.
Quote:So far, the BOJ's money printing has kept the cost for financing the government's massive public debt very low. A spike in that cost could stoke market fears Japan may be losing control of its finances, potentially triggering a damaging bond sell-off, some analysts say.
The statements above are quite contradictory.
Lose control??
They print their money.
They buy their bonds.
How to lose control?
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