Economy

Forget all the fancy talk about neutral interest rates and output gaps. The two basic questions facing the Federal Reserve are simple to state and complex to answer: is the world’s most powerful central bank finally committed to return monetary policy to serving the real economy rather than financial markets; and can it do so in an orderly fashion?These questions are yet to be sufficiently grasped by markets, and for good reason. Viewed from their perspective, the risk for the Fed of not following the market’s lead is too costly. Yet, even if they are ultimately correct, markets will very likely find themselves with much less of an influence on monetary policy than in recent times. The background to the current situation is well known. For too long, monetary policy has been essentially co-opted by markets. The phenomenon started innocently enough with central bankers’ desire to counter the damage that malfunctioning markets inflict on economic wellbeing. Rather than occurring rarely with well-targeted implementation, massive liquidity injections and floored interest rates developed into a habit.Over and over again, the Fed felt compelled to use its powerful liquidity-creation weapons to counter asset price declines, even when the risk of disorderly and volatile markets was not apparent. At times, such “unconventional” measures were consistent with the needs of the real economy. Too often, however, they were not. Like a child successfully throwing tantrums to get more sweets, markets came to expect looser financial conditions whenever there was a strong whiff of instability. This expectation evolved into insistence. In turn, the Fed went from just responding to market volatility to also trying to pre-empt it.Central bankers were not blind to the unhealthy co-dependencies. The current leaders of both the Fed and the European Central Bank, Jay Powell and Christine Lagarde, tried early in their tenures to change the dynamic. But they failed, and were forced into embarrassing U-turns that made markets feel even more empowered and entitled to insist on the continuation of ultra-loose policies.Today, however, the two-decade-long market dominance over monetary policy is threatened like never before by high and persistent inflation. Central banks have little choice but to relegate market considerations in the face of accelerating price increases that severely undermine standards of living, erode the future growth outlook and hit hardest the most vulnerable segments of society.The situation is particularly acute for the Fed given its gross mischaracterisation of inflation for most of last year, together with its failure to act decisively when it belatedly recognised that price instability had taken root under its watch. But how best to do so is a problem, given how much the Fed’s delayed understanding and reaction have narrowed the pathway for orderly disinflation. That is, the difficulty of reducing inflation without unduly harming economic wellbeing has only increased. For that, the central bank should have initiated the policy pivot a year ago. If the Fed now validates the aggressive interest rate rises that markets anticipate, starting with a 50 basis point increase when its top policy committee next meets on May 3-4, it risks seeing them price in yet more tightening. The outcome of this dynamic would be an even bigger policy mistake as the Fed pushes the economy into a recession. If, however, the central bank fails to validate market pricing, it could erode its policy credibility further. This would undermine inflation expectations, causing the inflation problem to persist well into 2023 if not beyond. The situation is made more complicated by the likelihood that these two alternatives would result in a degree of financial instability in the US and elsewhere. Even worse — and this may well be the most likely outcome — the Fed could flip-flop over the next 12 to 24 months from tightening to loosening and then tightening again. The Fed may characterise such flip-flopping as nimbleness but it would prolong stagflationary tendencies, weaken its institutional standing and fail decisively to return monetary policy to the service of the real economy. And for those in the markets that would deem this a victory, it would probably prove a fleeting one at best. The time has come to return monetary policy to the service of the real economy. It is a far from automatic and smooth process at this late stage. Yet the alternative of not doing so would be a lot more problematic. More

Jay Rushin used to look at global wheat prices once a quarter or so. Now he checks them every other day. The chief executive of H&H Bagels, a New York staple for 50 years, had hoped to reopen its Upper West Side store last summer, but a global semiconductor shortage meant that the toasters he ordered last May were not shipped until February.By the time the shop opened last week, redesigned as the flagship of a brand that Rushin hopes to franchise, the spot price of wheat — a crucial ingredient in bagels — had soared 35 per cent above last year’s levels in response to Russia’s invasion of Ukraine.With a tight labour market also driving wages higher, Rushin has raised prices by an average of 5 per cent and looked for ways to cut costs, dropping less popular items such as baked salmon from the menu and using software to schedule employees’ hours more efficiently.The challenges facing H&H are plaguing companies large and small across the US, as disruptions wrought by Russia’s war in Ukraine magnify the inflationary pressures brought on by Covid-19.The rise of US inflation to 40-year highs is showing up in increased prices for customers, reduced earnings outlooks for some companies and anxiety among policymakers about the effect on low-income consumers.Conagra Brands, the maker of Slim Jim meat snacks, warned this week that the rising cost of ingredients from chicken to butterfat had left it facing an “unprecedented” 26 per cent jump in prices over two years.Constellation Brands, the company behind Corona beer, told analysts it was paying 17 per cent more for cartons, 26 per cent more for bottle caps and 35 per cent extra for wooden pallets.Across corporate America, there were three times as many mentions of “inflation” in company presentations in March as there had been a year earlier, according to Sentieo, the data provider.Some companies are citing price pressures as reasons to lower their profit expectations. FactSet reported last week that more S&P 500 companies had issued negative earnings guidance than in any quarter since before the pandemic.WD-40, the lubricant oil manufacturer, for example, said it was raising prices but would have to trim its full-year net income guidance by about 2 per cent due to “the challenging inflationary environment”.Levi Strauss, meanwhile, beat Wall Street’s expectations for its fiscal first quarter but held to its full-year outlook in anticipation of more inflationary pressures in the coming months. Chip Bergh, chief executive, told the Financial Times that he had learnt from running businesses in the 1980s, the last time US inflation was this high, to raise prices in anticipation of increasing costs. “You’ve got to get in front of it because if you don’t, you just can’t catch up,” he warned.Companies have so far been able to pass on most of their higher costs without affecting sales. As the war between two of the world’s largest grain exporters sent cereal prices soaring last month, Earnest Research found that General Mills, PepsiCo and Kellogg, the makers of Cheerios, Quaker Oats and Special K, all implemented double-digit price increases.Even as the Federal Reserve tries to tame inflation by raising interest rates, some policymakers are voicing concerns about its disproportionate effect on poorer consumers.Lael Brainard, a Fed governor tapped by President Joe Biden’s administration to serve as vice-chair of the central bank, on Tuesday noted that low-income households spend 77 per cent of their income on necessities, more than double what higher-income households spend, and many are less able to save by buying in bulk.She illustrated the challenge by citing the example of an increase in the prices of both a brand-name cereal and a cheaper store brand that maintained the differential between them. “A household that had been purchasing brand-name cereal could save money by purchasing store-brand cereal instead,” she observed. “However, a household that was already purchasing the store brand would have to either absorb the increase in cost or consume less within that category.”

One consumer industries chief executive who is grappling with higher prices for resin and pulp echoed that concern, telling the FT: “From here, the economics get harder and harder for the middle and lower economic set.”A BCG poll found that just 40 per cent of investors now expect inflation to return to more normal levels by the end of 2022, down from 60 per cent in January, and several executives said fast-rising labour and logistics costs were exacerbating the inflation in commodity prices.Truck drivers had seen a $1.50-per-gallon increase in the price of diesel in a matter of weeks, noted Mac Pinkerton, president of North American surface transportation for CH Robinson, a truck freight group.If sustained, that would equate to $50bn to $60bn of additional supply chain costs for the industry, he estimated, with most passed on to customers.Logistics costs have also been inflated by companies offering higher wages to attract enough drivers to meet demand. Walmart, which two years ago said that its truck drivers earned an average of $87,500 a year, last week raised the starting pay week so they could earn up to $110,000 in their first year.Such pressures are forcing companies to adapt. Constellation Brands is hedging more aggressively, Levi Strauss has renegotiated rents, and Lowe’s, the DIY retailer, is optimising drivers’ routes to curb fuel costs.Others are trimming their product offerings in ways resembling H&H Bagels’ menu rethink.Mike Alkire, chief executive of Premier, a group-purchasing organisation for hospitals, said suppliers had been pushing for price increases on more than 170 products, while the hourly rate for a travelling nurse had risen threefold.Faced with such pressures, Premier was having to buy in bulk and narrow the range it offered, he said. “People used to [ask for] a specific colour of bedpan. All that is out the window.” More

Danish green energy company Orsted is building its coal stockpile in anticipation of burning more of the fuel next winter, just as the EU approved a ban on Russian coal imports as part of a fifth round of sanctions.Chief executive Mads Nipper said a global shortage of wood pellets, which fuel Orsted’s biomass power stations, meant the company was likely to use coal instead later in the year. “However much we hate it, we are very likely going to see a temporary increase in our coal use, compared to the trajectory that we have been in,” Nipper told the Financial Times. “That is driven by the situation out of the war,” he said, explaining that Russia’s invasion of Ukraine, combined with global supply chain challenges, had made it extremely hard to procure the specialised wood pellets Orsted usually relies on. “Biomass is hard to get right now because everyone is looking for fuel,” Nipper said. “We have sourced additional back-up coal to ensure that we are prepared.”The $59bn company’s share price has dropped by about one-sixth over the past 12 months, partly owing to low wind speeds that hit revenues. While Orsted is known as the world’s biggest developer of offshore wind farms, the company also has a gas trading arm, a US clean energy business, and operates nine power plants in Denmark. Of those, six plants run on wood pellets or wood chips; two run on gas; and one runs on coal. Some plants burn more than one type of fuel.In the midst of an energy crisis in Europe triggered by the war in Ukraine, Nipper said the increase in coal use was a “necessary short-term evil” and the company’s plans to close the one remaining coal plant next year were unchanged. Orsted also imports gas from Russia, under a purchase contract with Gazprom that runs until 2030. Moscow has demanded that foreign buyers pay for their gas in roubles — a condition that most EU countries have refused to meet — and threatened to cut off supplies if they do not. Nipper said that Orsted has “no intention” to pay for its gas in roubles. “We are sticking to the contractual terms that we have,” he said, adding that the company was in dialogue with the European Commission about how to handle the situation.“We really don’t want to deal with Gazprom, we would clearly rather not. But we need to make sure that whatever we do, does not send more money toward Russia,” said Nipper. Amid Europe’s growing energy security concerns, the region is accelerating its push toward renewable power such as wind and solar. Nipper called for governments to speed up the permitting process so that clean energy projects can be built more quickly. However, he acknowledged that because of the construction time required, wind power could not help to address the situation in the short term. “Converting an energy system, is not something that can happen in 12 or 24 months,” said Nipper. “But we are in a hurry, we need to do everything we can to speed up that conversion.” More

In 1931, John Maynard Keynes published a short essay entitled “Economic Possibilities for Our Grandchildren” in which he considered the feasibility of solving what he called “the economic problem”. According to Keynes, the issue of scarcity ought to have been dealt with by the early 21st century. Decades of capitalist progress would leave society with the capacity to produce the resources needed to guarantee everyone a good standard of living. The problem, at this point, would be finding ways to spend well-earned leisure time.

More than 90 years later, it is fair to say that Keynes’ prediction of abundance was not wrong: the scale of production possibilities available to us in 2022 is well beyond what he probably imagined in 1931. But “economic problems” have not gone away. In fact, there is an intellectual debate raging over how to define our primary issues and what to do about them. Is finding a way to create more growth still the key to a good society? Or is our primary economic problem finding a way to deal with inequality and environmental degradation?The most recent contribution to this debate comes from Jonathan Haskel, professor of economics at Imperial College Business School, and Stian Westlake, chief executive of the Royal Statistical Society. They situate themselves firmly in the “more growth” camp. Their book, Restarting the Future, suggests that capitalism can be revitalised by promoting “further investment” in what they call “intangible capital”. This thesis builds on their last collective effort, Capitalism without Capital, published in 2017. In that book, Haskel and Westlake outlined how the capitalist system has shifted from investment in physical capital, such as machines and factories, towards intangible capital, such as software. Importantly, this kind of capital behaves differently from physical assets: the more it makes up the economy, the more it can change the dynamics of capitalism itself. In their latest outing, Haskel and Westlake argue that the speed of these changes in capitalism has not been matched by developments in the institutions that govern the economy. For example, government research and development spending is still based on producing more brand new research when good quality innovation now derives from unique combinations of different kinds of existing capital. The result of these “institutional lags” has been sub-par investment in intangibles and low economic growth. The solution Haskel and Westlake propose is a range of institutional fixes that will drive prosperity in the new, intangible-rich economy. The book is strongest when it deftly explores the policies that could help enliven investment. Here, as economists, the authors can play on home turf — exploring the best way to squeeze juice out of the intangible orange. In a series of policy discussions on cities, finance, competition and R&D funding, they outline how intangibles can be harnessed to create growth and what more can be done to manage the undesirable impacts of economic transformation — such as the increasing divide between cities and towns. More controversial is their argument that enlivening the growth engine of intangible capital will produce a solution to our current political economic woes. This idea relies on a theory of social change where political and economic stability is essentially unlocked through growth. This growth in turn relies on finding the right institutional “code” to unlock the kind of market exchange which brings prosperity, happy citizens and a flourishing society. It is interesting to speculate what Keynes would have made of this argument. It is undoubtedly the case that he would have been impressed by Haskel and Westlake’s vision of a prosperous society, harnessing the power of “intangible” investment to create great leaps in productivity and output. He may also, one suspects, have been sceptical of whether further growth in an era of relative historical abundance is still the primary “economic problem”. This is especially the case in an era where capitalism’s growth orientation is increasingly indivisible from some of the overlapping, existential environmental crises confronting us. The insights of Haskel and Westlake on how institutions currently inhibit an economy dominated by intangibles are valuable. Their recommendations, if adopted, may well unlock further growth. But this alone cannot create a better future: the “economic problem” is now far more complex than that. Restarting the Future: How to Fix the Intangible Economy by Jonathan Haskel and Stian Westlake, Princeton University Press, £22, 320 pages More

SINGAPORE (Reuters) – The euro made a firm start to the week on investor relief that incumbent Emmanuel Macron led first-round voting in the French presidential election, while other moves were slight ahead of central bank meetings in Europe, Canada and New Zealand.The euro briefly flickered as high as $1.0955 in thin early hours of the Asia session, before settling about 0.15% higher than Friday’s close at $1.0890. It was also firmer on sterling and the yen.With 88% of votes counted, Macron garnered 27.41% and his far-right challenger Marine Le Pen was next with 24.9%.They will contest a runoff vote on April 24. Macron’s lead gave some confidence to markets leery of Le Pen’s protectionism even if she no longer advocates ditching the euro, though gains were capped ahead of Thursday’s European Central Bank meeting.”It’s a patchy bit of support,” said Westpac strategist Imre Speizer, as investors are also grappling with an ECB unlikely to sound as aggressive as Federal Reserve in heading off inflation.”I think that biggest story of the two central banks being quite different is probably quite supportive of the U.S. dollar in the longer run,” he said.The U.S. dollar index topped 100 for the first time in nearly two years on Friday, and was steady at 99.805 in morning trade. Against the Japanese currency the dollar was firm and bought 124.32 yen.The ECB has been weighing rising consumer prices against pressure on growth from war in Ukraine. It is expected to give more details about a wind down in asset purchases on Thursday but may not give any further explicitly hawkish signals. Central bank meetings are also due in Canada and New Zealand on Wednesday and interest rate swaps pricing indicates that traders see a more than 90% chance that each hikes rates by 50 basis points.That could leave both currencies vulnerable if a smaller rate rise is delivered.The New Zealand dollar wobbled 0.2% lower to $0.6836, while the Canadian dollar held at C$1.2583 per greenback.Elsewhere, the Australian dollar also eased 0.2% to $0.7447 as gains in commodity currencies start to fade further with a retreat in export prices. Sterling held at $1.3026.========================================================Currency bid prices at 0015 GMTDescription RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.0888 $1.0875 +0.13% +0.00% +1.0955 +1.0883 Dollar/Yen 124.3700 124.2900 +0.06% +0.00% +124.4200 +124.3600 Euro/Yen 135.42 135.14 +0.21% +0.00% +135.6500 +135.2900 Dollar/Swiss 0.9343 0.9362 -0.21% +0.00% +0.9344 +0.9290 Sterling/Dollar 1.3028 1.3033 -0.04% -3.67% +1.3040 +1.3028 Dollar/Canadian 1.2588 1.2572 +0.14% -0.44% +1.2590 +1.2567 Aussie/Dollar 0.7448 0.7460 -0.17% +2.45% +0.7465 +0.7440 NZ Dollar/Dollar 0.6837 0.6848 -0.19% -0.14% +0.6854 +0.6832 All spotsTokyo spotsEurope spots Volatilities Tokyo Forex market info from BOJ More

PARIS (Reuters) -French leader Emmanuel Macron and challenger Marine Le Pen qualified on Sunday for what promises to be a very tightly fought presidential election runoff on April 24, pitting a pro-European economic liberal against a far-right nationalist.With partial results putting Macron in first place ahead of Le Pen after the first-round voting, other major candidates admitted defeat. Except for another far-right candidate, Eric Zemmour, they all urged voters to block the far-right in the second round.But after five years in power in which his abrasive style has upset many, while Le Pen succeeded in softening her image, Macron will have to fight hard to win back disgruntled voters. He cannot take it for granted that voters will rally around a traditional anti-far right front.”Nothing is decided, and the battle we will wage in the next 15 days will be decisive for France and Europe,” Macron told supporters, urging all voters to rally behind him on April 24th to stop the far-right from ruling the European Union’s second-largest economy.Ifop pollsters predicted a very tight runoff, with 51% for Macron and 49% for Le Pen. The gap is so tight that victory either way is within the margin of error. Other pollsters offered a slightly bigger margin in favour of Macron, with up to 54%. But that was in any case much narrower than in 2017, when Macron beat Le Pen with 66.1% of the votes.Le Pen, who had eaten into Macron’s once-commanding 10-point poll lead in recent weeks thanks to a campaign focused on cost-of-living issues said she was the one to protect the weak and unite a nation tired of its elite.”What will be at stake on April 24 is a choice of society, a choice of civilisation,” she told supporters, who chanted “We will win!” as she told them: “I will bring order back to France.”Macron, meanwhile, told supporters waving French and EU flags: “The only project that is credible to help purchasing power is ours.””DISASTROUS”With 96% of the votes counted for Sunday’s first round, Macron garnered 27.41% of the votes and Le Pen 24.03%. A near total count of the vote was expected for later in the night. A Le Pen victory on April 24 would be a similar jolt to the establishment as Britain’s Brexit vote to leave the European Union (EU) or Donald Trump’s 2017 entry into the White House.France would lurch from being a driving force for European integration to being led by a euro-sceptic who is also suspicious of the NATO military alliance. While Le Pen has ditched past ambitions for a “Frexit” or to haul France out of the euro zone’s single currency, she envisages the EU as a mere alliance of sovereign states.Conservative candidate Valerie Pecresse warned of “disastrous consequences” if Macron lost, while the Socialists’ Anne Hidalgo urged supporters to vote for him “so that France does not fall into hatred.””Not one vote for Le Pen!” added hard-left candidate Jean-Luc Melenchon, who, according to the estimates, placed third with around 20% of the votes.But they all also had very harsh words for Macron and some of the very unpopular policies of his first mandate as well as an abrasive style that has put off many voters. “Emmanuel Macron played with fire,” Pecresse told supporters.”PAY ATTENTION” Zemmour acknowledged disagreements with Le Pen, but said Macron was a worse choice. Barely a month ago, Macron seemed on course for a comfortable re-election that, riding high in polls thanks to strong economic growth, a fragmented opposition and his statesman role in trying to avert war in Ukraine on Europe’s eastern flank.But he paid a price for late entry into the campaign during which he eschewed market walkabouts in provincial France in favour of a single big rally outside Paris. A plan to make people work longer also proved unpopular, enabling Le Pen to narrow the gap.Le Pen, an open admirer of Russian President Vladimir Putin until his invasion of Ukraine, had for months toured towns and villages across France. She focused on cost-of-living issues troubling millions and tapped into anger toward rulers.”Marine Le Pen knew how to talk to people about their more concrete problems. During the next two weeks he (Macron) will have to pay more attention to what is happening in France, take a diplomatic break,” said Adrien Thierry, a 23-year old Macron supporter.As the vote count progressed, Melenchon’s score rose to close to Le Pen’s, with 21.57% of the votes, while none of the others were in the double-digits, leading some supporters to briefly hope for a change in the final line-up, which eventually seemed out of reach. More

“Of course we will sue, because we have taken all the necessary steps to ensure that investors receive their payments,” Siluanov told the newspaper in an interview.”We will present in court our bills confirming our efforts to pay both in foreign currency and in roubles. It will not be an easy process. We will have to very actively prove our case, despite all the difficulties.”Siluanov did not elaborate on Russia’s legal options. Russia faces its first sovereign external default in more than a century after it made arrangements to make an international bond repayment in roubles earlier this week, even though the payment was due in U.S. dollars.Last week, Siluanov said Russia will do everything possible to make sure its creditors are paid.”Russia tried in good faith to pay off external creditors,” Siluanov said on Monday. “Nevertheless, the deliberate policy of Western countries is to artificially create a man-made default by all means.”Siluanov said Russia’s external liabilities amount to about 20% of the total public debt, which stood at about 21 trillion roubles ($261.7 billion). Of that, about 4.5-4.7 trillion roubles were external liabilities. Russia has not defaulted on its external debt since the aftermath of its 1917 revolution, but its bonds have now emerged as a flashpoint in its economic tussle with Western countries. A default was unimaginable until recently, with Russia rated as investment grade in the run up to its Feb. 24 invasion of Ukraine, which Moscow calls a “special military operation” and which on Sunday intensified in eastern Ukraine.”If an economic and financial war is waged against our country, we are forced to react, while still fulfilling all our obligations,” Siluanov said. “If we are not allowed to do it in foreign currency, we do it in roubles.”($1 = 80.2500 roubles) More

TOKYO (Reuters) -The Bank of Japan’s rare reappointment of a veteran technocrat behind the country’s massive monetary stimulus positions the bank for an eventual exit from governor Haruhiko Kuroda’s radical policies when his term ends next year.Having spent most of his career at the BOJ’s elite monetary affairs department, Shinichi Uchida, 59, was instrumental in drafting Kuroda’s “bazooka” asset-buying programme in 2013 and negative interest policy in 2016.While those policies create an image of him being a proponent of heavy monetary stimulus, Uchida also led the BOJ’s drive to slow its huge bond buying by introducing yield curve control in 2016 – a policy that caps long-term interest rates at zero but also relieved the central bank from buying bonds at a set pace.As its balance sheet became bloated and the financial sector’s pain from prolonged easing became more apparent, Uchida was instrumental in crafting steps to slow the BOJ’s purchases of risky assets and ease the strain on banks from low rates.The reappointment for another four-year term as the BOJ’s executive director, announced this month, will have Uchida, who joined the bank in 1986, oversee monetary policy design well beyond the end of Kuroda’s term in April next year.Uchida’s technical expertise and deep experience mean the dismantling of YCC, whenever it happens, will go smoothly, while his bi-partisan nature mean he will be a help, not a hindrance, to the rollback of Kuroda’s stimulus, say three sources familiar with the matter.”Because he’s created this complex framework, he’s probably the best person to roll it back,” said Mari Iwashita, chief market economist at Daiwa Securities and a veteran BOJ watcher.”That’s his strength, as well as his ability to quickly change tack on policy when he sees fit.”The BOJ has six executive directors that assist the board in making decisions on key matters. The roles are highly sought after and offered to only a handful of top BOJ staff.Uchida’s reappointment is unusual – historically, such positions last only a single four-year term, after which the officials retire from the BOJ for private sector jobs.NEITHER HAWK NOR DOVEHaving spent most of his career at the monetary affairs department, Uchida made his mark with a knack for designing complex policy frameworks and his ability to navigate BOJ leadership transitions.People who know him say Uchida is sharp-minded and worked well under both the dovish Kuroda and his predecessor Masaaki Shirakawa, who was wary of ramping up stimulus too much.”He’s a genius in crafting sophisticated policy ideas,” one of people said. “It’s hard to brand him as a hawk or dove.”That means Uchida is well placed to craft plans to either prolong the lifespan of YCC, or gradually phase it out.To be sure, the BOJ is in no rush to withdraw stimulus as it focuses on underpinning a fragile economic recovery, rather than fret about the prospect of too-high inflation.But some in the BOJ are wary of Japan becoming increasingly isolated in a global shift in central banking towards tighter monetary policy.While Japan’s comparably subdued inflation allows the BOJ to keep rates low for longer than its counterparts, there is near consensus within the bank its next move will be to dial back – not ramp up – stimulus, the sources say.Untangling YCC, a complex patchwork of measures to keep rates low while addressing the side-effects of prolonged easing without upending markets, is no easy task.The BOJ traditionally spends years brainstorming scenarios on its next possible move, a process in which Uchida will likely be deeply involved, the sources say.”If there’s even a slim chance of a policy tweak in the long run, the BOJ needs to be ready,” a second source said. “Uchida will certainly play a key role in the process.” More