The yen fell to a 20-year low against the dollar as the Bank of Japan’s ultra-loose monetary policy piles pressure on the Japanese currency at a time when US policymakers at the Federal Reserve are signalling their intent to raise interest rates.
The fall of about 0.5 per cent on Wednesday pushed the yen past ¥126 to the dollar, taking the currency almost 9 per cent lower for the year to date.
The BoJ’s pledge to continue stimulus measures in order to bolster Japan’s economy contrasts sharply with the global consensus among central banks, particularly the Fed, where policymakers are expected to raise interest rates this year to rein in surging inflation.
Japan’s stance also contrasts with New Zealand, whose central bank raised interest rates by half a percentage point yesterday — its biggest increase in 22 years — following worries about surging inflation exacerbated by Russia’s invasion of Ukraine.
Thanks for reading FirstFT Asia. Do you think Japan should tighten its monetary policy? Tell me what you think at firstft@ft.com. — Emily
The latest from the war in Ukraine:
Sanctions: US Treasury secretary Janet Yellen warned of economic and financial consequences for China and other countries that have maintained ties with Russia if they attempt to undermine sanctions unveiled by western allies.
Energy: A full EU embargo on Russian energy would trigger a major recession in Germany, according to the country’s top economic institutes.
Roman Abramovich: A court in the Channel Island of Jersey has imposed an order freezing more than $7bn in assets linked to the Russian oligarch.
US policy: The US is funnelling extra weapons to Ukraine and sharing more intelligence with Kyiv ahead of a renewed Russian offensive expected in Donbas.
Five more stories in the news
1. Shanghai lockdown stokes global supply chains anxiety Dozens of producers of crucial electronic components yesterday halted production at their factories in Kunshan, a city close to Shanghai. Companies and analysts said the shutdown was unavoidable after lockdown rules initially applied only in Shanghai were extended to Kunshan.
Related read: The world’s biggest luxury group LVMH reported stronger-than-expected sales growth in the first quarter despite the resurgence of Covid-19 disruptions in the key Chinese market.
2. Khan launches campaign against removal from office Imran Khan has kicked off a defiant campaign against his removal as Pakistan’s prime minister, calling on thousands of his supporters to “hold regular public protests” to seek early elections.
3. Subway attack suspect arrested in New York City The suspect in a New York City subway shooting that left 10 people wounded and traumatised the city was arrested by police and charged in federal court. Frank James, 62, was apprehended without incident in Manhattan’s East Village after a tip from a citizen, police said.
Go deeper: James’s precise motives remain unknown, but the attack appeared calculated to unnerve a city where public safety has become an overriding concern for residents and businesses struggling to recover from the pandemic.
4. South Korea signals nuclear fuel U-turn Won Hee-ryong, policy chief on President-elect Yoon Suk-yeol’s transition committee, said that outgoing president Moon Jae-in’s push to reduce the share of nuclear power in South Korea’s energy mix had increased greenhouse gas emissions and threatened to increase energy bills.
5. New Zealand rules man accused of murder can be extradited to China New Zealand’s Supreme Court has ruled that a South Korean man accused of murdering a woman in Shanghai can be extradited to face trial in China, a judgment that human rights groups say places undue faith in Beijing’s diplomatic promises.
The day ahead
Sikh festival of Vaisakhi The holiday marks the start of the Punjabi New Year. (BBC)
Israel GDP figures fourth-quarter growth figures will be published today. The nation’s economy is forecast to grow 5.5 per cent this year. (Reuters)
Results On a big day for US bank earnings Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo report first-quarter earnings. Ericsson, State Street and TSMC are also expected to report first-quarter results.
What else we’re reading and listening to
Asia jostles for rocket launch business In Japan’s Oita Prefecture, the local airport, which has struggled with the travel downturn caused by Covid, is rebranding as a spaceport for mid-air rocket launches. But rivals all over Asia are also joining this Earth-based space race.
Biden and Ukraine: from climate champion to oil price panic US president Joe Biden was elected with bold plans for the green transition. But ahead of midterm elections he is facing an energy crisis, writes our US energy editor Derek Brower.
Breaking the silence on disability in the workplace The FT’s Working It podcast is about doing work differently. This week, host Isabel Berwick argues that while we have heard a lot about diversity and inclusion in workplaces, one group is often left behind: people with disabilities.
The rise of South Africa’s xenophobic vigilantes The brutal murder of Mbhodazwe “Elvis” Nyathi, who was beaten and left to burn in the street, has highlighted the rise of xenophobic vigilantes as an organised political force in South Africa as President Cyril Ramaphosa’s government sees its authority wane and struggles to turn around a flagging economy.
Property
Price per square foot, school catchment areas and good transport links have long featured at the top of most prospective homeowners’ checklists. Now, however, there is an altogether less visible factor in house-hunters’ decisions about where to move: the air they breathe.
Source: Economy - ft.com
