Aurelia Butler

Manufacturing activity in China contracted for a fourth straight month in July while growth in services and other sectors slipped, adding to calls for Beijing to unveil concrete measures to boost the flagging recovery of the world’s second-biggest economy.China’s official manufacturing sector purchasing managers’ index for July came in at 49.3, slightly higher than analysts’ forecasts of 49.2 and above June’s reading of 49 but still in contraction territory.The non-manufacturing PMI, which includes sectors such as construction and agriculture, fell to 51.5 from 53.2 the previous month. It was short of the 53 forecast by Goldman Sachs.A reading below 50 indicates a month-on-month contraction, while one above 50 signals an expansion.The July “data provides little encouragement that the economy is turning the corner”, Robert Carnell, head of Asia-Pacific research at ING, the Dutch bank, wrote in a note.An anticipated manufacturing and export-led rebound from pandemic restrictions has failed to materialise for China’s economy this year as global economic conditions have deteriorated.Growth in the country’s huge services sector, an important source of employment, has weakened while slowing consumer spending and investment, flagging exports and a property sector liquidity crisis have hampered growth. Gross domestic product rose 0.8 per cent in the second quarter compared with the previous three months, well below forecasts.The Chinese Communist party’s senior decision-making body, the politburo, last week announced measures to try to boost the growth, which it acknowledged was making “tortuous progress”.But analysts said Beijing would probably not unleash broader fiscal stimulus because of high debt levels, especially among local governments.The PMI figures show “there is yet to be a significant turnaround in the softening recovery activity”, said Erin Xin, greater China economist at HSBC. “This puts more onus on policymakers to move swiftly to provide much-needed policy support.”China’s state planner on Monday announced a consumption package targeting vehicle purchases and development in rural areas. The central bank has also eased monetary policy.China’s benchmark CSI 300 rose 0.6 per cent on Monday, while the Hang Seng China Enterprises index added 1.3 per cent, with technology and property stocks climbing sharply on expectations that policymakers would have to step up efforts to stimulate the economy.Xin added that contractions in the July PMI sub-indices for employment could indicate that economic conditions would “continue to weigh on jobs and consumption, possibly delaying a full recovery”. Youth unemployment soared to a record 21.3 per cent in June.Hong Kong on Monday also reported second-quarter growth of just 1.5 per cent year on year, far below a 2.9 per cent expansion in the first three months.

The slowdown in July in non-manufacturing activity, previously rare bright spot, pushed the gauge closer to contraction, with most sub-indices other than business expectations already near or below the 50-point threshold.Analysts at Citi argued however that the decline in manufacturing activity was showing signs of easing, indicating that “industrial momentum” might be “showing signs of bottoming”.Yifan Hu, regional chief investment officer and head of macroeconomics for Asia-Pacific at UBS Global Wealth Management, said the politburo directives and other stimulus measures would kick in during the second half, predicting more interest rate reductions and bank reserve requirement cuts to inject liquidity into the system. “Fiscal policy is to be more proactive with stronger infrastructure support and targeted tax and fee cuts,” he added.Separate data from research group China Beige Book, which publishes alternative economic indicators, showed manufacturing activity picked up in July, but retail sales were markedly down compared with the previous month.Additional reporting by Hudson Lockett and Chan Ho-him in Hong Kong More

When Apple unveiled its Vision Pro mixed-reality headset to the world’s media in June, few were aware of the significant role played by a little-known contract manufacturer in China in creating the revolutionary device.Shenzhen-based Luxshare Precision Industry has won favour and increasing business with the iPhone maker in part by being prepared to test “crazy” ideas in its factories, according to an Apple supply chain employee.It is the sole assembler of the Vision Pro and has been seeing it through the initial manufacturing problems of integrating its complex electronics and the setbacks of too-frequent flaws in a crucial component — its micro-OLED displays. Apple has been forced to scale back production expectations for next year, with two people close to Apple and Luxshare saying it was preparing to make fewer than 400,000 units in 2024.Still, the company and its chief have come a long way to be now manufacturing the “most complex consumer device anyone has ever made”, according to analysts, and taking on Taiwan’s Foxconn, the world’s biggest contract electronics manufacturer. When Foxconn started out in China with the opening of a new factory in Shenzhen in 1988, 21-year-old Grace Wang was one of the first migrant workers to be employed on its production lines. Wang displayed enough ingenuity and skills to earn a quick promotion to manager, as her employer began a decades-long dominance over the making of tech gadgets. Thirty-five years on, the factory girl is now chair of her own contract electronics maker, after co-founding and building up Luxshare to be Foxconn’s most serious challenger.Working its way up from being a subcontractor supplying connectors in 1999, Luxshare grew to become a public company, listing in the southern city of Shenzhen in 2010 and selling directly to Apple from 2011. Revenues have surged from Rmb2.5bn ($350mn) in 2011 to Rmb214bn last year.

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Wang has been instrumental in its rise, say those who have worked with her. “She’s the hero behind Luxshare, learning a lot from Foxconn about factory management and business expansion,” said one longtime employee who did not wish to be named.“She is like a big sister or a mum in day-to-day management — attentive and strong.”While Foxconn is best known as the maker of the iPhone, Luxshare has also been steadily expanding its business with Apple, becoming an important partner and alternative supplier of services. While revenues and profits remain far below Foxconn’s level, its high-growth profile led to its market capitalisation overtaking its rival’s at one point in early 2021.Apple’s high opinion of its capabilities can be measured by the level of difficulty in the assignments awarded — from setting up factories outside China as geopolitical tensions increase to producing higher-end phones.Luxshare first produced simple connectors for the iPhone and MacBook laptop through one of its acquisitions, before extending production to critical components in other Apple products, including AirPods, Apple Watch, and then the iPhone. In 2022, Luxshare generated more than 70 per cent of its revenues from Apple, compared with a proportion of less than 50 per cent at Foxconn, according to annual reports and analysts’ interpretations.Apple’s strict requirements for its suppliers tend to boost their credentials with other clients. Luxshare was crowned “gold supplier” by Huawei in 2018. Industry experts say Luxshare’s rapid rise has been helped by Apple chief executive Tim Cook’s enthusiasm for the Chinese company, whose facilities he has visited. It has also benefited from being selected to help Apple’s efforts to diversify its supply chain beyond China.

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Analyst Tony Zhang from CLSA says this represents a challenge, with the need to adapt from centralised production to decentralised management of factories worldwide and to train local workers in different territories. One such market is India, where Luxshare established an office in 2019 and bought two well-established production plants in Chennai from the former mobile-phone maker Nokia, and Motorola. It has also applied for permission to build a factory in India with a domestic partner, according to people close to the company and Indian government officials. But it has been cautious on expansion, with Wang hinting at an event in February that the supply chain in India was not mature enough. Eddie Han, an analyst at Isaiah Research, says strained relations between China and India may also be limiting Luxshare’s business development. The company said in May it would “only invest [in India] with sufficient guarantees” for the business environment.Instead, Vietnam has emerged as a better bet, with a similar culture to China and smoother transportation links. Wang said in February that Vietnam was “the best option” for manufacturing relocation.The company has been building plants there since 2016 and has already started to migrate Apple production work. Luxshare’s management team said in April that the Vietnam plants were focused on making mature products, while the more challenging tasks, such as mobile phones and new product assembly, were still being carried out in China.

Next for Luxshare is the iPhone 15 series, which will begin production in China in August ahead of its official launch event. The company has received a record share of Apple orders to assemble the new version of the smartphone, according to two people close to Apple and Luxshare. It will also assemble premium models for the first time, breaking Foxconn’s stranglehold on producing the iPhone Pro series, the Financial Times has reported. Luxshare’s ability to produce enough qualified handsets “quickly and efficiently” will determine its success in gaining a larger share of smartphone production, said Ivan Lam, a senior analyst at Counterpoint.Offering lower prices and greater flexibility has made the company an attractive option for Apple, which is considering giving it an even more significant role in producing the iPhone 16 series, dependent on performance in delivering the 15, the two people said.Wang will be the one pushing the company to maintain its standards and prove itself as a supplier that can continue to rival Foxconn on quality and reliability.“One must be a handsome bird in order to fly with the phoenix,” she has often said of the relationship with Apple, citing an old Chinese proverb. More

The writer is Asia EM Equity Strategist at Morgan StanleyThe global economic paradigm is shifting quickly, and the “de-risking” of supply chains is a crucial topic. Some have argued that de-risking while attempting generational leaps in technology and decarbonisation is not a realistic objective. Critics of such a push suggest that it will result in a breakdown of trade and investment, guaranteeing higher inflation. But we are optimistic that it can happen without causing a major shock to the global economy. The shift towards a multipolar world has been developing over the past five years, and this regime is now entrenched. Security, rather than economic efficiency, is the new imperative for policymakers amid hegemonic US-China rivalry and the reverberations of Russia’s war in Ukraine. Stark lines of sovereignty are being drawn over technology that has been produced by highly globalised research and development programmes over recent decades.Significant imbalances and concentrations in global market shares have built up across many segments of the international economy since the 1990s and it is clear from the disruptions that occurred during the Covid-19 pandemic that this needs to change. The scale of the new investment required to de-risk supply chains will be enormous. Our analysts project a cost of $1.5tn to support friend-shoring and onshoring of supply chains including those for advanced semiconductors and critical minerals, while the global electric vehicle battery industry will require $7tn of capital expenditure over the next 20 years. Committed investment in clean energy has exceeded $2tn since 2021, helped by government incentives of more than $500bn. A multipolar policy toolkit is emerging to channel resources into this endeavour, encompassing large subsidy programmes, expanded export and investment controls and new regulatory frameworks. For a successful transition away from the globalised regime, policymakers must continue to work with the corporate sector and focus on the most critical nodes. Careful implementation will be needed to preserve the collaboration that has been key to technological breakthroughs, such as the development of extreme ultraviolet lithography, the technology used in advanced microchips. Given the challenges, why are we more sanguine about the inflation and growth dangers of supply chain de-risking? We see three reasons for optimism. First, global growth will be boosted by the immense capex programmes from a variety of companies around the world, creating a new driver of demand and employment. Second, intense competition for emerging technologies is likely to boost productivity — consider the examples that came out of cold war-related research and development, including semiconductors and satellite communications, and the potential unlocked by AI. Finally, the higher costs of alternative supply chains will be mitigated by the additional capacity they bring.As examples of the positive feedback loop between policy support and technological progress, our analysts see green electricity generation costs falling through 2030, with capital costs for wind and solar generation dropping 50 per cent, making them 35 per cent cheaper than fossil fuels on average at that point. We also see the cost of lithium-based electric vehicle battery storage falling almost 40 per cent below current levels by 2030, with potential sodium ion batteries being potentially 20 to 30 per cent more cost-effective than that. But the risk of widespread global decoupling is high, given the temptation to weaponise economic interdependence amid current conflicts. The high stakes of success or failure in emerging industries such as artificial intelligence, advanced semiconductors, quantum computing and renewables are also motivating protectionism. Indeed, current policy trends could fuel a cycle where the defensive actions of one country to reduce supply chain risks reinforce the concerns of trading partners, leading to industrial policy tit-for-tats that leave us all worse off. International communication and compromise will be key to avoiding this scenario. Rather than indiscriminate reshoring and economic isolation, we believe the end goal of de-risking supply chains can be achieved through a combination of higher inventory buffers and greenfield capex, which would boost and diversify production capacity. Such an outcome could put a multipolar economy on an even more resilient and balanced footing than the globalised world that is being left behind. More

Signs that UK inflation is finally cooling will not stop the Bank of England raising interest rates to a fresh 15-year high this week, but it could allow rate-setters to slow the pace of tightening, according to economists.After months of disappointing data, a sharp fall to 7.9 per cent in consumer price inflation in June sparked hopes that UK policymakers were finally winning their fight to restore price stability.Ahead of the data’s release, investors were betting that the BoE would need to continue rapidly raising the Bank rate from its current level of 5 per cent to well above 6 per cent to return inflation to its 2 per cent target.Now, hopes are rising that UK policymakers, as well as their counterparts at the Federal Reserve and European Central Bank, could be nearing the end of their tightening cycles. Market pricing suggests that even in the UK, where inflation has persisted at higher levels, rates will peak below 6 per cent. But the BoE’s forthcoming policy decision rests on a knife edge. Investors view a 0.25 percentage point increase as the more likely outcome, but they still see a significant chance of a second consecutive 0.5 percentage point rise.“The economy is clearly far too hot for the Monetary Policy Committee to relax,” said Thomas Pugh, economist at the audit company RSM UK. He added that while the slowdown in inflation could “tip the balance” towards a 25 basis point rise, “inflation is far from under control and some members of the committee will see value in sending another strong signal to the market”.When the MPC last met in June, it said it would be looking closely at the tightness of labour market conditions, the behaviour of wage growth and at services price inflation. If these pointed to “more persistent” inflationary pressures, then “further tightening in monetary policy would be required”.Since then, the evidence has been mixed. Services inflation has dropped, but less than the MPC was expecting when it last published forecasts in May. There are signs of the labour market slackening, with unemployment edging higher, vacancies dropping and the workforce starting to grow again. But wage growth has accelerated to record highs to become one of the main drivers of services inflation.These data “could be deployed to make the case for either a 25 basis point or a 50 basis point [increase],” said Cathal Kennedy, senior UK economist at RBC Capital Markets. He predicted the nine member committee will be split, with the majority voting to slow the pace of tightening, a hawkish contingent favouring a 50 basis point rise, and the dovish Swati Dhingra voting to leave rates on hold.Andrew Goodwin, at the consultancy Oxford Economics, is among the economists expecting a smaller rate increase, arguing that the change in market expectations “gives the MPC cover to dial tightening down”.But Dave Ramsden, the only member of the MPC who has spoken publicly since the latest inflation data, struck a hawkish note, saying earlier this month that inflation “remains much too high” and underlining the MPC’s resolve to “address the risk of more persistent strength in domestic wage and price setting”.If the committee does want to keep tightening policy at pace, however, it will have a tricky task explaining why because the forecasts it will present alongside its rate decision are likely to show that both GDP and inflation will be weaker in the medium term than it expected in May. This is because the predictions are based on market expectations for the path of interest rates averaged over two weeks in mid July, when they were higher than current pricing and much higher than in May. Sterling has also strengthened since May, while wholesale gas prices have fallen.This combination means the forecasts are likely to show inflation falling below the 2 per cent target over a two to three year horizon.“The MPC’s new forecasts will cast doubt on whether interest rates need to rise further at all,” said Samuel Tombs, at the consultancy Pantheon Macroeconomics.The MPC has played down the significance of such contradictory signals in its forecasts at previous meetings, saying it is now placing more weight on its judgment of the risks to its central projection.“The committee has moved away from its reliance on forecasting models and is now placing more weight on judgment and risks,” said Philip Shaw, economist at Investec.After repeatedly failing to predict the persistence of inflation, the BoE has just launched a review of its forecasting process, to be led by the former Fed chair Ben Bernanke.Analysts think the BoE is unlikely to send a clear signal on how it expects policy to evolve at future meetings — although Paul Dales, at the consultancy Capital Economics, said it would want to “leave the door open to more rate hikes” if warranted by later data.But Matthew Swannell, economist at BNP Paribas, offered another reason why the MPC might want to act aggressively now, rather than playing for time. “The BoE only has limited time before it becomes an international outlier,” he said, arguing that both the Fed and the ECB could have finished raising rates by September,” he said. “With that in mind, the BoE only has a couple of opportunities to tighten rates without becoming the last hawk standing.” More

LONDON/SYDNEY (Reuters) – Commercial real estate investors and lenders are slowly confronting an ugly question – if people never again shop in malls or work in offices the way they did before the pandemic, how safe are the fortunes they piled into bricks and mortar?Rising interest rates, stubborn inflation and squally economic conditions are familiar foes to seasoned commercial property buyers, who typically ride out storms waiting for rental demand to rally and the cost of borrowing to fall. Cyclical downturns rarely prompt fire sales, so long as lenders are confident the investor can repay their loan and the value of the asset remains above the debt lent against it.This time though, analysts, academics and investors interviewed by Reuters warn things could be different.With remote working now routine for many office-based firms and consumers habitually shopping online, cities like London, Los Angeles and New York are bloated with buildings local populations no longer want or need.That means values of city-centre skyscrapers and sprawling malls may take much longer to rebound. And if tenants can’t be found, landlords and lenders risk losses more painful than in previous cycles.”Employers are beginning to appreciate that building giant facilities to warehouse their people is no longer necessary,” Richard Murphy, political economist and professor of accounting practice at the UK’s Sheffield University, told Reuters. “Commercial landlords should be worried. Investors in them would be wise to quit now,” he added.WALL OF DEBTGlobal banks hold about half of the $6 trillion outstanding commercial real estate debt, Moody’s (NYSE:MCO) Investors Service said in June, with the largest share maturing in 2023-2026. U.S. banks revealed spiralling losses from property in their first half figures and warned of more to come.Global lenders to U.S. industrial and office real estate investment trusts (REITs), who supplied credit risk assessments to data provider Credit Benchmark in July, said firms in the sector were now 17.9% more likely to default on debt than they estimated six months ago. Borrowers in the UK real estate holding & development category were 4% more likely to default.Jeffrey Sherman, deputy chief investment officer at $92 billion U.S. investment house DoubleLine, said some U.S. banks were wary of tying up precious liquidity in commercial property refinancings due in the next two years.”Deposit flight can happen any day,” he said, pointing to the migration of customer deposits from banks to higher-yielding ‘risk-free’ money market funds and Treasury bonds.”As long as the Fed keeps rates high, it’s a ticking time bomb,” he said. Some global policymakers, however, remain confident that the post-pandemic shift in the notion of what it means ‘to go to work’ will not herald a 2008-9 style credit crisis.Demand for loans from euro zone companies tumbled to the lowest on record last quarter, while annual U.S. Federal Reserve ‘stress tests’ found banks on average would suffer a lower projected loan loss rate in 2023 than 2022 under an ‘extreme’ scenario of a 40% drop in commercial real estate values.Average UK commercial property values have already fallen by around 20% from their peak without triggering major loan impairments, with one senior regulatory source noting that UK banks have far smaller property exposure as a proportion of overall lending than 15 years ago. But Charles-Henry Monchau, Chief Investment Officer at Bank Syz likened the impact of aggressive rate tightening to dynamite fishing.”Usually the small fishes come to the surface first, then the big ones – the whales – come last,” he said.”Was Credit Suisse the whale? Was SVB the whale? We’ll only know afterwards. But the whale could be commercial real estate in the U.S.”.CUTTING SPACEGlobal property services firm Jones Lang LaSalle – which in May pointed to a 18% annual drop in first quarter global leasing volumes – published data this month showing prime office rental growth in New York, Beijing, San Francisco, Tokyo and Washington D.C. turned negative over the same period. In Shanghai, China’s leading financial hub, office vacancy rates rose 1.2 percentage points year-on-year in Q2 to 16%, rival Savills said, suggesting a recovery would depend on nationwide stimulus policies succeeding. Businesses are also under pressure to slash their carbon footprint, with HSBC among those cutting the amount of space they rent and terminating leases at offices no longer considered ‘green’ enough.More than 1 billion square meters of office space globally will need to be retrofitted by 2050, with a tripling of current rates to at least 3%-3.5% of stock annually to meet net-zero targets, JLL said.Australia’s largest pension fund, the A$300 billion AustralianSuper, is among those on the sidelines, saying in May it would suspend new investment in unlisted office and retail assets due to poor returns. Meanwhile, short-sellers continue to circle listed property landlords the world over, betting that their stock prices will sink.The volume of real estate stocks lent by institutional investors to support shorting activity has grown by 30% in EMEA and 93% in North America over the 15 months to July, according to data provider Hazeltree. According to Capital Economics, global property returns of around 4% a year are forecast this decade, compared with a pre-pandemic average of 8%, with only a slight improvement expected in the 2030s. “Investors must be willing to accept a lower property risk premium,” Capital Economics said. “Property will look overvalued by the standards of the past.” More

SYDNEY (Reuters) – Asian shares looked to end the month on a firm note on Monday in a week littered with major economic releases, central bank meetings and earnings updates from mega caps Amazon and Apple, though rising Japanese bond yields were a risk.The early impetus for shares was positive following Friday’s U.S. data showing an easing in wage costs and core inflation, which fuelled hopes the Federal Reserve was done tightening.”The data surprises bolster confidence that global core inflation – ex. China – will fall sharply and set the stage for a developed market central bank policy pause and emerging market easing even if growth remains firm,” said Bruce Kasman, head of economic research at JPMorgan (NYSE:JPM).Figures due this week include the U.S. ISM surveys on manufacturing and services, the July payrolls report and European inflation. China factory surveys are due later on Monday.The Bank of England is widely expected to raise rates by at least a quarter point, but markets are more divided on whether the Reserve Bank of Australia will hike or stay on hold.Almost 30% of the S&P 500 report results this week and, so far, earnings have been good enough to see the index extend its rally to 10% since the start of June.S&P 500 futures added another 0.1% on Monday, bringing its gains for July to almost 3%, with Nasdaq futures up 0.2%. Apple Inc (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) both report on Thursday, while other well-known names with results due include Western Digital Corp (NASDAQ:WDC), Caterpillar Inc (NYSE:CAT), Starbucks Corp (NASDAQ:SBUX), and Advanced Micro Devices (NASDAQ:AMD).Asian markets have also been trending higher, with China’s benchmark index enjoying a 4.5% jump last week on hopes for more stimulus from Beijing.Early on Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%, having gained 4.9% so far in July to reach a five-month high.PARSING THE BOJJapan’s Nikkei rose 1.0% to re-take the 33,000 level and nudge closer to its recent three-decade peak.Investors are still pondering the implications of Friday’s shock decision by the Bank of Japan (BOJ) to lift the lid on bond yields, in a step away from its ultra-easy policies. Analysts at BofA estimate the BOJ’s bond buying added $1.3 trillion to global liquidity in the past 18 months and provided a low floor for global rates, so any sustained rise in Japanese government bond yields could ripple though other bond markets.Japanese 10-year yields climbed further to 0.6% on Monday, still short of the new cap of 1.0% and limiting the boost to the yen. While the yen initially rallied on the BOJ move, it soon reversed course, and the dollar climbed from 138.05 yen to as high as 141.18 late on Friday.On Monday, the dollar was off slightly at 140.78 yen, with investors still seeming happy to run carry trades, or yen-funded positions in higher-yielding currencies.”Friday’s action might best be viewed as an attempt to head off a fresh wave of yen-weakening carry trade activity, by at least ceasing to resist pressure for 10-year yields to rise above 0.5%,” said Ray Attrill, head of FX strategy at National Australia Bank (OTC:NABZY).”Friday’s actions do, though, fail to provide a catalyst for a secular reversal of yen weakness.”The euro had also recovered from its initial pullback to stand at 155.17 yen, while steadying at $1.1026 after some wild swings last week.In commodities, gold was steady at $1,957 an ounce, having gained around 2% for the month so far. [GOL/]Oil prices have climbed for five weeks in a row as production cuts by OPEC+ tightened supply. [O/R]Brent was off 9 cents on Monday at $84.90 a barrel, while U.S. crude eased 6 cents to $80.52. More

TOKYO (Reuters) – Some Bank of Japan (BOJ) policymakers baulked at former chief Haruhiko Kuroda’s idea of deploying a “bazooka” massive stimulus a decade ago, unconvinced central banks had the power to jolt public perceptions, accounts of the meeting released on Monday showed.The 2013 deliberation underscores a challenge central banks around the world still face – the difficulty of communicating policy intentions effectively and convincing the public of the impact its monetary measures had on the economy.The BOJ releases the full account of its policy-setting meetings after a decade. Hand-picked by then premier Shinzo Abe to pull Japan out of deflation, Kuroda shocked markets by deploying in April 2013 a massive asset-buying programme and pledging to fire up inflation to its 2% target in roughly two years.The decision marked a turnaround from the approach of his predecessor Masaaki Shirakawa, who was suspicious of the idea that central banks could shake the public out of a deflationary mindset with radical stimulus measures.”My belief is that we need to deploy unprecedented monetary easing steps … and communicate it in a simple way to overhaul market and public expectations,” Kuroda said at the policy meeting on April 3-4, 2013, according to a full excerpt of the deliberations released on Monday.Under intense criticism for doing too little, too late to end Japan’s economic stagnation, many in the nine-member board agreed to what one BOJ staff described as a “shock-and-awe” approach.”We must shift away from a piecemeal approach,” then-deputy governor Hiroshi Nakaso said. “We need to radically overhaul market and public expectations with bold easing.”Not all in the board, however, were fully convinced. Former economist Takahide Kiuchi was wary of setting a two-year timeframe for hitting the price target, citing “very high uncertainty” of the chance of success, the minutes showed.Another board member, Takehiro Sato, also voiced doubt over the idea the BOJ could control inflation expectations by adjusting the pace of money printing, the minutes showed.”It’s highly uncertain whether pumping money (in huge sums) could change public perceptions,” Sato said. “It’s worth trying and see if it works. But it’s something close to a gamble.”Former banker Koji Ishida said he would propose reviewing the stimulus programme if no tangible results were seen one year into its launch, the minutes showed.The stimulus, dubbed quantitative and qualitative easing (QQE), failed to fire up inflation to 2% and forced Kuroda to revert to a policy targeting interest rates in 2016.Since then, the BOJ has capped long-term borrowing costs at about zero and has pledged to maintain ultra-low interest rates until its 2% inflation target is sustainably met and accompanied by wage growth.After serving two, five-year terms, Kuroda stepped down from the top BOJ post in March. More