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Top Fed officials, eager to tackle the latest inflation, say they are continuing to raise interest rates, even in the euro zone, where Ukraine's invasion has fueled fears of a slowdown in economic growth. The European Central Bank (ECB) is accelerating its hawkishness. Ironically, there is growing concern about economic overkill as monetary policy is over-tightened. Attention has focused on the difficulty of quelling inflation (a so-called soft landing) without causing a recession. Both the U.S. and European Central Banks maintained their stance on a successful soft landing, but as the pace of rate hikes progressed, Oxford Economics faced the risk of excessive rate hikes, increasing significantly with each rate hike. The main reason for the difficult soft landing is that the impact of monetary tightening on the economy and prices cannot be known until more than half a year in advance. Although not sure which route it is and how big the impact is, if you notice it, it is likely to tighten too much, and even if you rush to cut interest rates, you will lose it sooner or later. Worryingly, uncertainty about the effects of tightening is a move by banks to tighten corporate credit standards from a global perspective. |
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The Japanese government and the LDP are accelerating the arms race in the name of the Ukraine war. It has articulated plans to increase defense spending to 2 percent of gross domestic product (GDP) and is working on strengthening weapons to reflect "enemy base attack capability." Nihon Keizai Shimbun said on the 7th that the Liberal Democratic Party plans to propose to the government to increase defense spending and introduce military equipment by the end of this month, while keeping in mind the emergency (war) in Taiwan, the national plan is revised to the end of this year. He reports that his goal is to embody this in a security strategy. The newspaper added that Russia's invasion of Ukraine had sparked public opinion on strengthening Japan's defense capabilities, and the proposal was being brought forward a month earlier. The main content of the Liberal Democratic Party's proposal is to increase defense spending. It will include a plan to raise defense spending to more than 2 percent of GDP from the current level of 1 percent. Achieving measures such as expected timing and annual increases will be more specific than ever. There are two main reasons why the Democratic Party insists on increasing defense spending. With the Ukrainian war and the U.S. having to deal with Russia, Japan must strengthen its defenses against China and North Korea. Internationally, the U.S. defense budget for fiscal year 2023 (October 2022-September 2011) increased by 4.2% compared with this year, and Germany also increased its total domestic production to more than 2%, a trend that continues. "The LDP's goal is to spark public discussion about possible emergencies across Japan after the Ukrainian invasion," the Nikkei reported. The fact that the LDP has moved so quickly is largely influenced by public opinion. A telephone poll conducted by the Yomiuri Shimbun from the 1st to the 3rd showed that 64% of people answered "agree" to strengthen Japan's defense capabilities. Former Prime Minister Shinzo Abe has also been insisting on increasing defense spending. Former Prime Minister Abe said in a speech on the 3rd in Yamaguchi Prefecture, his region, "(defense spending) 2022 (2021) supplementary budget". That adds up to about 6 trillion yen. It's important to secure this money in next year's budget. This year's defense spending is about 5.45 trillion yen, which is the norm for this budget, which, as former Prime Minister Abe said, must be increased by about 11.1 percent. The LDP is expected to include concerns about having direct attacks on neighboring countries such as North Korea and China. Specific details of the missile base's "enemy base attack capability." It is planning to request the introduction of military equipment to increase deterrence against North Korea and China, and to tease out the methods and conditions for having an "enemy base attack capability." The Japanese government is also accelerating the expansion of weapons. The Tokyo Shimbun plans to increase the long-range "stand-off" missile Self-Defense Forces based on the revision of the Ministry of Defense's "Mid-term Defense Forces Development Plan" on the National Defense Program Outline and Weapon Systems, which was reported at a private meeting held by the Liberal Democratic Party's Security Investigation Committee. "The purpose is to strengthen deterrence against China and North Korea by increasing the production and performance of weapons that can be converted into capabilities to attack enemy bases," the newspaper analyzed. The Defense Ministry said at a closed meeting that it called for improvements. "Type 12 Surface-to-Ship Missile (SSM)" and secure budget for early commercialization. The Ministry of Defense plans to increase the range of 200 kilometers to more than 1,000 kilometers, five times the current range of 200 kilometers, not only on the ground and on ships, but also on fighter jets and deployed in actual combat until the second half of the 2020s, which is being promoted middle. |
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The Bank of Japan's monetary policy meeting will run for two days from April 27. In the context of the widening of the Japan-US interest rate gap, the depreciation of the yen is accelerating, and whether to "fine-tune" another dimension of monetary easing measures is the biggest focus. -- The Bank of Japan's April 27-28 monetary policy meeting received unprecedented market attention. Is there a "correction" in monetary easing? The main scenario is "maintaining the policy status quo". Indeed, the Bank of Japan's "yield curve control" (YCC, manipulation of short- and long-term interest rates) has accelerated the yen's depreciation. At this point, however, the government and the BOJ have agreed that "this inflation will not be dealt with through monetary tightening, but households and businesses vulnerable to higher prices will be dealt with through fiscal policies such as subsidies and benefits." it seems that. Also, actually modifying YCC is not easy. Although there may be some minor revisions to the outer parts of the policy, such as "forward guidance" implying the future of interest rates, the YCC of the "Honmaru" is likely to remain unchanged at this meeting. ──Why did the Bank of Japan choose to maintain the status quo? The quarterly outlook report ("Economic and Price Outlook") will be released at this meeting, but the consumer price (core CPI excluding fresh food) outlook will be revised up 1% from the previous 1% and is expected to be revised upward to the second half of the table . However, under the assumption that the overseas inflation factor disappears after 2023, the economic growth outlook will be lowered, and the core CPI will fall again. It is likely to conclude that "a change of policy in the direction of monetary tightening is inappropriate in the context of cost-push inflation." 与此原文有关的更多信息要查看其他翻译信息，您必须输入相应原文 |
