Aurelia Butler

TOKYO (Reuters) -Japan’s new central bank governor Kazuo Ueda will see his communication skills put to test at his debut policy meeting on Friday, as markets look for clues on how soon the country’s prolonged ultra-low interest rates could end.At the meeting Ueda chairs just three weeks into his term, the Bank of Japan (BOJ) is widely expected to maintain its short-term interest rate target of -0.1% and a pledge to guide the 10-year bond yield around zero.The central bank is also seen maintaining dovish guidance that pledges to keep interest rates at “current or lower levels” to ensure Japan sustainably hits its 2% inflation target accompanied by solid wage growth, analysts say.But growing signs of broadening inflationary pressure could cast doubt on the BOJ’s argument the recent cost-driven price pressures will soon peter out.Core consumer inflation in Japan’s capital hit 3.5% in April, beating expectations and exceeding the BOJ’s 2% target, while an index stripping away fuel costs rose at the fastest pace in four decades, data showed on Friday.At his post-meeting news conference, Ueda is likely to reiterate the need to keep monetary policy ultra-loose until there is more evidence that sustained wage growth will push trend inflation towards the BOJ’s 2% target.Global recession fears also cloud the outlook for Japan’s export-reliant economy, giving the BOJ another reason to go slow in phasing out its massive stimulus, analysts say.”The BOJ is concerned about a slowdown in the economy, and believes maintaining ultra-loose monetary policy is necessary to encourage economic activity,” said Katsutoshi Inadome, senior strategist at SuMi Trust.Much is riding on how the BOJ manages an eventual transition away from the loose policy of former Governor Haruhiko Kuroda, with global investors worried higher Japanese interest rates could trigger capital flight and reshape financial markets in ways they are not prepared for.Key to an orderly transition will be Ueda’s ability to clearly communicate his policy intentions without upending markets.With inflation exceeding 3% and the cost of living remaining stubbornly high, Ueda may struggle to convince markets that a tweak to yield curve control (YCC) is not imminent.The BOJ’s forceful defense of an implicit 0.5% cap set for the 10-year bond yield has drawn criticism for distorting the shape of the yield curve and draining bond market liquidity, heightening expectations that Ueda will soon phase out YCC.The International Monetary Fund has urged the BOJ to allow long-term yields to move more flexibly around its target with a tweak to YCC, to make a future exit from easy policy smoother.Despite Ueda’s reassurances to keep YCC intact, some market players are bracing for another surprise move having been caught off guard by his predecessor’s abrupt decision in December to raise the yield cap to 0.5% from 0.25%.Aside from Ueda’s comments, hints on the policy outlook could come from the BOJ’s fresh quarterly growth and inflation forecasts due out on Friday, which will include for the first time projections extending through fiscal 2025.The new estimates will indicate how the BOJ sees the balance between headwinds from slowing overseas growth, and recent signs of broadening wage growth, analysts say.Under current projections made in January, the BOJ expects core consumer inflation to hit 1.6% this year and 1.8% in fiscal 2024. It expects the economy to expand 1.7% this fiscal year before slowing to 1.1% the following year.Many analysts expect the BOJ to project inflation to hover near, but stay slightly below, the bank’s 2% target for both fiscal 2024 and 2025. More

Lloyds said its Business Barometer gauge of confidence – which measures the difference between respondents who felt more confident or less confident about their trading and economic prospects – rose to 33% from 32% in March, further above its long-running average of 28%. The outlook of firms’ optimism about the wider economy improved by five points to 28%.Hann-Ju Ho, senior economist at Lloyds Bank, said the recent increases in business morale indicated positive momentum in Britain’s economy at the start of the second quarter.Britain has been the slowest among the Group of Seven rich nations to recover from the economic hit caused by coronavirus pandemic but it has so far defied forecasts that it would fall back into a recession.However, more than half of companies surveyed by Lloyds intended to raise their prices in the coming 12 months despite easing cost pressures, potentially adding to inflationary pressures.The BoE has hiked interest rates 11 times since December 2021 and is expected to deliver a further 25 basis-point increase taking Bank Rate to 4.5% on May 11 in an effort bring down double-digit inflation.Lloyds said wage growth hit a seven-month high, with nearly a third of businesses expecting pay to increase by at least 3%.The survey also showed hiring intentions improved for the fifth month in a row, with the net balance ticking up three points to 27%, the highest level since June last year. More

OTTAWA (Reuters) – Canada’s Senate on Thursday passed the government’s online streaming legislation after a 10-month debate over a law that will force firms like Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) Inc-owned YouTube to offer more Canadian content.Bill C-11, or the Online Streaming Act, cleared the unelected upper chamber of the Canadian parliament with 52 votes to 16 and one abstention. With the Senate’s approval, the bill just needs royal assent from the governor general to become law.The legislation aims to bring the likes of Spotify (NYSE:SPOT), Disney+ and other online streaming platforms under the stewardship of broadcasting regulator CRTC, and hold them to the Canadian content requirements that apply to TV and Radio channels. It was proposed by Prime Minister Justin Trudeau’s Liberal government last year, and passed in the lower house of the parliament in June, with support from the opposition New Democrats and Bloc Quebecois.The government says the legislation will ensure that online streaming services promote Canadian music and stories, and support Canadian jobs.Opponents, including Canada’s main opposition Conservative party, have criticized the bill as an overreaching measure that would impact freedom of expression and choice on the internet.YouTube has said it does not oppose the bill in its entirety, but has raised concerns over its impact to user-generated content. The video platform says the law would force it to recommend Canadian content on its homepage, rather than videos tailored to a user’s specific interests.Heritage Minister Pablo Rodriguez, who introduced the bill in February 2022, says the changes are meant for commercial programs streamed online and would not apply to individual content creators.Once it becomes a law, the CRTC will develop and implement regulations for both traditional and online broadcasting services. More

(Reuters) -Pinterest Inc forecast second-quarter revenue growth below Wall Street estimates on Thursday, as the image-sharing platform grapples with a pullback in advertising spending, sending its shares down 13% in trading after the bell. While Pinterest (NYSE:PINS) said that the ad market was stabilizing, it warned the market was still uncertain. Shares of peer Snap Inc (NYSE:SNAP) fell about 18% aftermarket on weak first-quarter revenue and the company warned it could miss estimates for the second as well.Smaller digital ad sellers such as Pinterest and Snap are losing ground in a weak economy to big tech rivals Alphabet (NASDAQ:GOOGL) and Meta Platforms as advertisers stick with tried and tested platforms. This follows strong pandemic era sales when advertisers spent heavily to reach customers online. In a bid to beef up its ad business, Pinterest also announced that it was opening up third-party ad demand, which would allow other parties to deliver ads on its platform. It announced Amazon (NASDAQ:AMZN) as its first partner, as it looks to bring more brands and products onto its platform. “We believe recently appointed CEO Bill Ready is looking for ways to better leverage its platform on the e-commerce side, creating more shoppable experiences for customers that utilize the platform”, said Angelo Zino, senior equity analyst at CFRA Research. CEO Ready said that the company was using next-generation AI to bring better recommendations and ads among other things to the platform. Global monthly active users (MAUs) on the image-sharing platform that lets users create online pinboards grew by 7% to 463 million, above estimates of 454.03 million, according to Refintiv data.  The company’s revenue rose 5% to $602.58 million in the first quarter ended March 31. Analysts on average had expected $592.99 million, according to Refinitiv data.Pinterest said it expected revenue growth in the current quarter to be in line with revenue growth in the first quarter and the fourth quarter of 2022. Fourth quarter revenue grew 4%. Wall Street was estimating growth of 6.15%, according to Refinitiv data. More