Blog: No Change in Bank of Japan’s Rate Targets; Join Today’s WSJ Live Q&A With St. Louis Fed President Bullard –

No Change in Bank of Japan’s Rate Targets; Join Today’s WSJ Live Q&A With St. Louis Fed President Bullard By James Christie

Good day. The Bank of Japan on Wednesday maintained its interest-rate targets and reiterated it intends to cap the 10-year Japanese government bond yield at 0.5%. The BOJ last month in a surprise move lifted the cap to 0.5% from the previous ceiling of 0.25%, which investors took as a sign the bank was joining the Federal Reserve and other central banks in raising interest rates. Some analysts predicted the BOJ would lift the cap again at its two-day meeting that ended Wednesday or even scrap the cap, ending a policy dating to 2016 known as yield curve control. Today, please join Wall Street Journal chief economics correspondent Nick Timiraos as he interviews St. Louis Fed President James Bullard, who last year urged a rapid increase in interest rates by the Fed to rein in high inflation in the U.S. You can join their WSJ Live Q&A through the link provided below.

Now on to today’s news and analysis.

Top News Despite Pressure, Bank of Japan Keeps Rate Targets Unchanged

TOKYO-The Bank of Japan kept its interest-rate targets unchanged Wednesday despite strong pressure from investors on the bank’s new 0.5% cap for the 10-year government bond yield.

The Japanese central bank decided to leave short-term interest rates at minus 0.1% and its target for the 10-year Japanese government bond yield at around zero. The bank reiterated that it intends to cap that yield at 0.5% .

Too Early for Bank of Japan Policy Shift, Economy Minister Says

Japan’s economy isn’t at the stage when monetary policy can be normalized, economy minister Yasutoshi Nishimura said, after the Bank of Japan maintained its current ultra-easy stance at a policy meeting.

Fed Must Avoid Declaring Victory Over Inflation Too Soon, Barkin Says

The Federal Reserve must avoid the mistake of declaring victory over inflation too soon, Federal Reserve Bank of Richmond President Tom Barkin said Tuesday in an interview on the Fox Business Network. “If you back off while inflation is still elevated, it will come back even higher the next time, meaning you’ve got to do even more damage to take control of it,” Mr. Barkin said. He also said companies are likely preparing for a recession but the timeline for a downturn “keeps getting pushed out” in part because the data remain healthy. (MarketWatch)

Fed Talks: A Conversation With St. Louis Fed President James Bullard

Federal Reserve Bank of St. Louis President James Bullard was an outspoken advocate last year for rapidly raising interest rates to combat high inflation. He joins Nick Timiraos, The Wall Street Journal’s chief economics correspondent, to discuss his outlook for the economy, inflation and interest rates in 2023. Join this WSJ Live Q&A at 9:30 a.m. ET today .

U.S. Economy December Retail Sales Report to Gauge Holiday Spending

A report on December U.S. retail sales will show consumers’ appetite for spending on gifts, dining out and big-ticket purchases during the final month of the holiday season, which retailers have said turned out to be weaker than expected.

FTC Plan to Ban Noncompete Clauses Shifts Companies’ Focus

More companies likely would turn to a patchwork of alternative mechanisms to keep people from leaving and taking valuable information with them, including nondisclosure agreements, lawyers say.

Tax Season Is Coming; These Firms Can’t Find Enough Accountants

A national shortage of accountants is prompting small and midsize firms to hire overseas for the first time as they seek workers to audit U.S. companies’ books and prepare Americans’ tax returns.

Key Developments Around the World China Says Economy to Return to Faster Growth After Covid Isolation

President Xi Jinping’s top economic adviser sought to restore global investor confidence in a Chinese economy much battered by a self-imposed Covid isolation, saying growth would return to prepandemic levels this year.

China’s Shrinking Population Is Deeper Problem Than Slow Growth OPEC Remains Cautious on China Despite Reopening Hopes Oil Demand to Hit Record Level This Year as China Reopens, IEA Says

WTO Chief Sees Some Upside to Trade Outlook

The outlook for the global economy is gloomy, but it is also uncertain , and trade flows could grow more rapidly than expected this year, the head of the World Trade Organization said at the World Economic Forum in Davos, Switzerland.

Live Updates From the World Economic Forum U.K. Inflation Falls for Second Month, Following Global Move

The U.K.’s annual rate of inflation fell for a second straight month in December, as gasoline prices cooled, according to official data, the latest sign that the global surge in consumer prices that began in early 2021 is slowing.

Financial Regulation Roundup Big Banks Might Face Breakup, Top Regulator Says

Big banks may need to be broken into smaller pieces if they become too big to manage and are unable to fix significant regulatory lapses , a top federal banking regulator said in a warning shot across Wall Street on Tuesday.

FTX Discloses ‘Substantial Shortfall’ of Customer Assets

Bankrupt cryptocurrency exchange FTX has said it hasn’t found enough cash and cryptocurrency assets to make customers whole , suggesting a long road ahead as the company works to get money back to customers.

In Africa, FTX Posed as Haven From Tumbling Currencies, Inflation A Crypto Magnate Saw the Risks and Still Was Hammered

A year ago, Barry Silbert’s 40% stake in crypto conglomerate Digital Currency Group Inc., or DCG, was valued at more than $3 billion. Today, Mr. Silbert is trying to keep DCG’s lending firm out of bankruptcy .

Many Companies Are Shying Away From Carbon Credits

Less than a quarter of 137 global companies surveyed in the fourth quarter of 2022 plan to use carbon credits , despite more than 90% of respondents promising to cut their net greenhouse gas emissions to zero by 2050.

Forward Guidance Wednesday (all times ET)

8:30 a.m.: U.S. producer-price index for December; U.S. retail sales for December

9:15 a.m.: U.S. industrial production and capacity utilization for December

9:30 a.m.: St. Louis Fed’s Bullard speaks at virtual WSJ Live Q&A event

10 a.m.: NAHB/Wells Fargo Housing Market Index for January; U.S. manufacturing and trade inventories and sales for November

1 p.m.: Kansas City Fed’s George speaks to The Exchequer Club of Washington, D.C.

2 p.m.: Federal Reserve Beige Book

3 p.m.: Philadelphia Fed’s Harker speaks at 2023 Lyons CEEE Economic Forecast

5 p.m.: Dallas Fed’s Logan speaks at University of Texas at Austin McCombs School of Business


4:30 a.m.: Bank of England bank liabilities and credit conditions surveys for fourth-quarter 2022

5:30 a.m.: ECB’s Lagarde in panel discussion on ‘Finding Europe’s New Growth’ during the World Economic Forum in Davos

7:30 a.m.: ECB publishes account of Dec. 14-15 monetary policy meeting of Governing Council

8:30 a.m.: U.S. housing starts for December; U.S. weekly jobless claims

9 a.m.: Boston Fed’s Collins speaks at Boston Fed’s New England Public Policy Center and UMass Amherst’s Donahue Institute conference

12 p.m.: ECB’s Schnabel in moderated webinar on monetary policy in times of pandemic and war hosted by Finanzwende e.V.

1:15 p.m.: Fed’s Brainard speaks on economic outlook at University of Chicago Booth School of Business

6:35 p.m.: New York Fed’s Williams speaks to Fixed Income Analysts Society

Research Investors Advised to Brace for Resilient Inflation

Inflation may still rebound and keep the Federal Reserve from calling “mission accomplished,” Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, says in a report. She says energy prices are poised to rebound if the global economy gets healthier and Europe’s austerity is relaxed. “A retreating U.S. dollar, which has already caused import prices to soar, is further amplifying a resurgence in inflationary pressures,” while “labor shortages, pent-up demand and medical costs could stall progress on services inflation,” Ms. Shalett adds.

-Paulo Trevisani

Bank of Canada Might Consider Pause After Inflation Undershoots

National Bank still believes the Bank of Canada should consider pausing its interest rate increases next week after the aggressive tightening orchestrated last year that the central bank says brought real rates essentially back to prepandemic levels. Inflation in Canada in the final quarter of 2022 was four-tenths of a percentage point lower than what the BOC projected last October, and where the bank saw inflation settling at 2.8% at the end of 2023, National Bank expects it will be below that level as early as the second quarter. “The actions taken so far will continue to dampen economic activity in the quarters ahead and, consequently, inflation,” National Bank says.

-Robb Stewart

Commentary Commodities Warrant Cautious Optimism, Not Exuberance, in 2023

Commodities bulls have left the pen, ready for a long run. Odds are that 2023 will end with industrial-metal prices, at least, higher than they are now. But the story is a bit more complicated than just that, Megha Mandavia writies.

(MORE TO FOLLOW) Dow Jones Newswires

01-18-23 0715ET

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