Aurelia Butler

TOKYO (Reuters) – The Bank of Japan should discuss revising its yield curve control (YCC) policy at an early stage, a board member was quoted as saying at a June policy meeting, a summary of opinions at the rate review released on Monday.While the central bank should keep overall monetary policy ultra-loose, it should debate tweaking YCC to improve market function and mitigate its “high cost,” the member was quoted as saying.It was the first time the BOJ summary showed a board member explicitly mentioning the need for an early debate of a tweak to YCC.”The Bank should maintain the overall framework of monetary easing for the time being,” the member said.”That said, a revision to the treatment of YCC should be discussed at an early stage,” taking into account the need to prevent sharp fluctuations in interest rates in the future phase of an exit from current monetary policy, the member said.The dollar fell 0.23% against the yen after the release of the BOJ summary as some market players interpreted the comment as signalling the chance of an early change to YCC.While the summary does not identify who made the comments, board member and former commercial banker Naoki Tamura has publicly warned of the rising cost of YCC such as causing market dysfunction and narrowing bank margins.At the June meeting, the BOJ maintained ultra-easy monetary policy including its YCC targets – set at -0.1% for short-term interest rates and around 0% for the 10-year bond yield.BOJ Governor Kazuo Ueda has repeatedly ruled out the chance of an early end to ultra-loose policy, including YCC, due to the need to spend more time determining whether wages will rise enough to sustainably keep inflation at the bank’s 2% target. More

SINGAPORE (Reuters) – Stocks slipped slightly and oil rose in early trade on Monday as investors figured an abortive weekend mutiny by Russian mercenaries raised questions about stability and crude supply.Brent crude futures rose 1% to $74.55 a barrel and U.S. crude poked above $70, recouping a little of losses made last week. Japan’s Nikkei fell 0.2% and Australia’s ASX 200 fell 0.3%.The safe-haven yen also rose a bit, though it had help from hints at possible currency intervention from Japan’s top FX diplomat and a summary of opinions showing a central bank board member pushed for a debate on its yield curve control policy.S&P 500 futures were 0.2% higher.Russian mercenaries made a short-lived rebellion on Saturday, seizing the southern city of Rostov and advancing on Moscow demanding the removal of Russian military commanders in charge of the war in Ukraine.The private Wagner army then withdrew after striking a deal guaranteeing their safety and the exile of their leader, Yevgeny Prigozhin, to Belarus. The consequences for the Ukraine war were not clear, though the challenge to Russian President Vladimir Putin’s authority was the starkest in decades of his leadership.”Geopolitical risk amid internal instability in Russia has increased,” said Rystad Energy analysts Jorge Leon. “As such, we are likely to see a marginal uptick in oil prices in the coming days, if the situation does not deteriorate.”U.S. Secretary of State Antony Blinken said the turmoil in Russia could take months to play out, while Italy’s foreign minister said it had shattered the “myth” of Russian unity. Elsewhere markets were already on edge about a darkening growth outlook, as China’s post-pandemic recovery stalls and global interest rates remain high, and traders were unwilling to take any new positions on the basis of Russian events.The risk-sensitive Australian dollar was steady at $0.6679. The euro nursed last week’s modest drop at $1.0906 and sterling held at $1.2728.”I don’t think the market can get its head around working out if there are implications,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank (OTC:NABZY) in Sydney. “People may think that ultimately Putin’s grip on power is weakened here. Maybe the Ukrainians may be emboldened to be upping their counteroffensives,” he said, but without obvious progress traders in Asia would be focused on China.China returns from holidays with the yuan having dropped sharply in offshore trade, leaving investors looking to the morning’s fix of the onshore trading band for signs of the central bank’s level of comfort with the slide.The offshore yuan last traded at 7.21 per dollar.The Japanese yen, which has been on a slide as global interest rate expectations rise and Japan’s central bank stays steadfastly dovish, bounced about 0.3% to 143.31 per dollarJapan’s top currency diplomat Masato Kanda said on Monday authorities will respond to any excessive moves and did not rule out intervening, as happened last year. The Bank of Japan should also discuss revising its yield curve control policy at an early stage, a board member was quoted as saying at a June policy meeting, a summary of opinions released on Monday showed. More

TOKYO (Reuters) -Japan will not rule out any options available to respond appropriately to excessive currency moves, its top currency diplomat Masato Kanda said on Monday, stepping up warnings against recent yen weakening that was “rapid and one-sided.”The vice finance minister for international affairs also told reporters that currencies should move stably reflecting fundamentals after the Japanese yen weakened beyond 143 yen on Friday, a seven-month low versus the dollar, and fell to 15-year low beyond 155 yen to the euro.The Japanese currency, often perceived as a safe-haven asset, is now coming under renewed selling pressure, threatening an import cost spike in a blow to consumers.”We have all options available and we are not ruling out any options,” Kanda said when asked whether authorities stand ready to intervene in the market. “I won’t comment on what to do now.”The monetary policy divergence between the Bank of Japan (BOJ) and the U.S. Federal Reserve was seen as driving up the dollar, as Japan continues easing while the U.S. central bank has tightened policy aggressively to fight inflation.Japan last conducted a rare yen-buying intervention in October to stem weakening when the Japanese currency plunged to a 32-year low near 152 yen against the dollar.When asked about the chances of currency intervention, Kanda told reporters he would not rule out any options.”Regardless of the direction, it’s generally not good for the economy if exchange rates move excessively in a way that deviates from economic fundamentals,” he said.”Underlying moves are rapid and one-sided. Therefore we are watching carefully with a strong sense of urgency, and will respond appropriately to excessive moves.”He added that authorities were focusing on the pace of moves in the yen, rather than its levels.Investors have been selling yen after the BOJ kept interest rates ultra-low on June 16 and vowed to maintain its massive stimulus, in contrast to other central banks tightening monetary policy to combat rising inflation. More