www.reuters.com Open in urlscan Pro
2600:9000:235a:6000:15:5a3e:9d40:93a1  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip to main content

Exclusive news, data and analytics for financial market professionalsLearn more
aboutRefinitiv

 * World
   Browse World
    * Africa
    * Americas
    * Asia Pacific
    * China
    * Europe
    * India
    * Israel and Hamas at War
   
    * Japan
    * Middle East
    * Ukraine and Russia at War
    * United Kingdom
    * United States
    * Reuters NEXT

 * US Election
 * Business
   Browse Business
    * Aerospace & Defense
    * Autos & Transportation
    * Davos
    * Energy
    * Environment
    * Finance
    * Healthcare & Pharmaceuticals
   
    * Media & Telecom
    * Retail & Consumer
    * Future of Health
    * Future of Money
    * Take Five
    * World at Work

 * Markets
   Browse Markets
    * Asian Markets
    * Carbon Markets
    * Commodities
    * Currencies
    * Deals
    * Emerging Markets
    * ETFs
    * European Markets
   
    * Funds
    * Global Market Data
    * Rates & Bonds
    * Stocks
    * U.S. Markets
    * Wealth
    * Macro Matters

 * Sustainability
   Browse Sustainability
    * Boards, Policy & Regulation
    * Climate & Energy
    * Land Use & Biodiversity
    * Society & Equity
   
    * Sustainable Finance & Reporting
    * The Switch
    * Reuters Impact
    * COP29

 * Legal
   Browse Legal
    * Government
    * Legal Industry
    * Litigation
    * Transactional
    * US Supreme Court

 * Breakingviews
   Browse Breakingviews
    * Breakingviews Predictions

 * Technology
   Browse Technology
    * Artificial Intelligence
    * Cybersecurity
    * Space
    * Disrupted

 * More
   Investigations
   Sports
    * Athletics
    * Baseball
    * Basketball
    * Cricket
    * Cycling
    * Formula 1
    * Golf
    * NFL
    * NHL
    * Soccer
    * Tennis
   
   Science
   Lifestyle
   Graphics
   Pictures
   Wider Image
   Podcasts
   Fact Check
   Video
   Sponsored Content
    * Reuters Plus
    * Press Releases
   
   Live

My News

Sign InSubscribe



OECD URGES JAPAN'S CENTRAL BANK TO GRADUALLY RAISE INTEREST RATES

By Leika Kihara
January 11, 20245:31 AM GMT+1Updated a year ago
Text
 * Small Text
 * Medium Text
 * Large Text

Share
 * X
 * Facebook
 * Linkedin
 * Email
 * Link

Staff members of Bank of Japan walk between the BOJ headquarters buildings in
Tokyo, Japan September 20, 2023. REUTERS/Issei Kato/File Photo Purchase
Licensing Rights, opens new tab
 * Summary

 * BOJ should continue efforts to make YCC flexible - OECD
 * Japan is at 'turning point' with durable 2% inflation in sight
 * Monetary policy can gradually, modestly begin tightening - OECD

TOKYO, Jan 11 (Reuters) - The Bank of Japan should gradually raise short-term
interest rates and make its bond yield control policy more flexible, if
inflation stays around its 2% target and is accompanied by sustained wage
growth, the OECD said on Thursday.
While the BOJ made tweaks to its yield curve control (YCC) last year to loosen
its tight grip on long-term interest rates, markets could challenge the policy
again if inflation remains above its 2% target and global yields go up, it said.
Advertisement · Scroll to continue

The central bank should thus continue efforts to make YCC more flexible, such as
by raising the 10-year bond yield target or moving to a short-term yield target,
the Organisation for Economic Cooperation and Development (OECD) said.
The BOJ should also gradually raise short-term rates from early 2024 if
inflation stays around its 2% target, wage growth accelerates and the output gap
closes, the OECD said in its 2024 report on Japan.
Advertisement · Scroll to continue

"Japan is at a turning point, with inflation more likely to settle durably
around the 2% inflation target than at any time since its inception," the report
said on the prospects for achieving the BOJ's price target, which was introduced
in 2013.
"Greater flexibility in the conduct of yield curve control and a gradual modest
increase in the short-term policy interest rate are warranted, based on
projections of sustained inflation and wage dynamics," it said.

With inflation having exceeded 2% for well over a year, many market players
expect the BOJ to pull short-term interest rates out of negative territory this
year in a historic shift away from its prolonged ultra-loose monetary policy.
Any such move would follow steps the BOJ took last year to phase out YCC, a
policy that sets a 0% target for the 10-year government bond yield, such as by
watering down a rigid 1% cap set for the yield to a loose reference.

BOJ Governor Kazuo Ueda has stressed the bank's resolve to keep ultra-loose
policy settings intact until sustained achievement of 2% inflation, accompanied
by durable wage rises, comes into sight.
OECD Secretary-General Mathias Cormann said it was understandable that the BOJ
would be keen to gather as much data as possible in judging whether Japan is
ready for higher rates.
But he said the OECD was "perhaps more optimistic that inflation will more
durably settle around 2%", even though the pace of price growth will likely slow
somewhat this year.

"Monetary policy can gradually and modestly begin tightening," he told a news
conference.
In the event of a rate hike by the BOJ, policymakers must be vigilant about
potential spillovers on domestic and global financial stability, the OECD said
in the report.
"Communicating the current and future monetary stance clearly and in a timely
manner is also key," it added.

Get a look at the day ahead in Asian and global markets with the Morning Bid
Asia newsletter. Sign up here.

Reporting by Leika Kihara; Editing by Kim Coghill and Edmund Klamann

Our Standards: The Thomson Reuters Trust Principles., opens new tab

 * Suggested Topics:
 * Asian Markets
 * Asian Markets

Share
 * X
 * Facebook
 * Linkedin
 * Email
 * Link

Purchase Licensing Rights


READ NEXT

 * Asian MarketscategoryChina Nov factory activity expands for second month as
   Trump threats loom
 * Russia's Rosneft may delay refinery modernisation due to high interest rates,
   taxes
 * EnergycategoryRussia's Gazprom swings to Q3 loss on one-off tax as 9-month
   income surges
 * India pins growth hopes on Trump keeping crude prices low
 * India's October infrastructure output grows 3.1% on year
 * Macro MatterscategoryIndia economy grows 5.4% in July-Sept quarter




MARKETS


 * BRAZIL'S FINANCE MINISTER, CONGRESS LEADERS SEEK TO CALM MARKETS ON TAX
   CHANGE CONCERNS
   
   Marketscategory · November 30, 2024
   
   Brazil's currency rebounded on Friday from record intraday lows after
   congressional leaders said they would put the brakes on government income tax
   reform, and the finance minister stressed that fiscal commitment goes beyond
   a new spending cuts package.

 * MarketscategoryTSX climbs 'wall of worry' to gain 6.2% in NovemberNovember
   29, 2024
 * MarketscategoryStocks rally, dollar droops in abbreviated sessionNovember 29,
   2024
 * MarketscategoryColombia 12-month inflation through November seen at
   5.13%November 29, 2024
 * Macro MatterscategoryCanada's economy expands by just 1%, chances of big rate
   cut jumpNovember 29, 2024




SITE INDEX


LATEST

 * Home
 * Authors
 * Topic Sitemap
 * Archive
 * Article Sitemap


BROWSE

 * World
 * Business
 * Markets
 * Sustainability
 * Legal
 * Breakingviews
 * Technology
 * Investigations
 * Sports
 * Science
 * Lifestyle


MEDIA

 * 
   Videos
 * 
   Pictures
 * 
   Graphics
 * 
   Podcasts


ABOUT REUTERS

 * About Reuters, opens new tab
 * Careers, opens new tab
 * Reuters News Agency, opens new tab
 * Brand Attribution Guidelines, opens new tab
 * Reuters and AI, opens new tab
 * Reuters Leadership, opens new tab
 * Reuters Fact Check
 * Reuters Diversity Report, opens new tab


STAY INFORMED

 * Download the App (iOS), opens new tab
 * Download the App (Android), opens new tab
 * Newsletters


INFORMATION YOU CAN TRUST

Reuters, the news and media division of Thomson Reuters, is the world’s largest
multimedia news provider, reaching billions of people worldwide every day.
Reuters provides business, financial, national and international news to
professionals via desktop terminals, the world's media organizations, industry
events and directly to consumers.


FOLLOW US

 * X
 * Facebook
 * Instagram
 * Youtube
 * Linkedin


THOMSON REUTERS PRODUCTS

 * WESTLAW, OPENS NEW TAB
   
   BUILD THE STRONGEST ARGUMENT RELYING ON AUTHORITATIVE CONTENT,
   ATTORNEY-EDITOR EXPERTISE, AND INDUSTRY DEFINING TECHNOLOGY.

 * ONESOURCE, OPENS NEW TAB
   
   THE MOST COMPREHENSIVE SOLUTION TO MANAGE ALL YOUR COMPLEX AND EVER-EXPANDING
   TAX AND COMPLIANCE NEEDS.

 * CHECKPOINT, OPENS NEW TAB
   
   THE INDUSTRY LEADER FOR ONLINE INFORMATION FOR TAX, ACCOUNTING AND FINANCE
   PROFESSIONALS.


LSEG PRODUCTS

 * WORKSPACE, OPENS NEW TAB
   
   ACCESS UNMATCHED FINANCIAL DATA, NEWS AND CONTENT IN A HIGHLY-CUSTOMISED
   WORKFLOW EXPERIENCE ON DESKTOP, WEB AND MOBILE.

 * DATA CATALOGUE, OPENS NEW TAB
   
   BROWSE AN UNRIVALLED PORTFOLIO OF REAL-TIME AND HISTORICAL MARKET DATA AND
   INSIGHTS FROM WORLDWIDE SOURCES AND EXPERTS.

 * WORLD-CHECK, OPENS NEW TAB
   
   SCREEN FOR HEIGHTENED RISK INDIVIDUAL AND ENTITIES GLOBALLY TO HELP UNCOVER
   HIDDEN RISKS IN BUSINESS RELATIONSHIPS AND HUMAN NETWORKS.

 * Advertise With Us, opens new tab
 * Advertising Guidelines
 * Purchase Licensing Rights, opens new tab

 * Cookies, opens new tab
 * Terms of Use
 * Privacy, opens new tab
 * Digital Accessibility, opens new tab
 * Corrections
 * Site Feedback, opens new tab

All quotes delayed a minimum of 15 minutes. See here for a complete list of
exchanges and delays.

© 2024 Reuters. All rights reserved






WE VALUE YOUR PRIVACY

We and our 152 partners will store and access information on your device with
your consent. Browsing data is collected through the use of cookies to process
personal data. You can give or withdraw your consent by clicking on the `Show
Purposes` button. You can manage your choices and exercise your right to object
on the basis of legitimate interest at any time by clicking on the cog icon at
the bottom left corner of every page.Cookie PolicyPrivacy Statement


HOW AND WHY WE PROCESS PERSONAL DATA

Use precise geolocation data. Actively scan device characteristics for
identification. Store and/or access information on a device. Personalised
advertising and content, advertising and content measurement, audience research
and services development. List of Partners (vendors)

Allow All Reject All Show Purposes



Feedback