Bank of Japan:

 https://mainichi.jp/english/articles/20210618/p2g/00m/0bu/038000c

Article:

TOKYO (Kyodo) -- The Bank of Japan decided Friday to extend the deadline for its scheme to support corporate funding by six months until next March and maintained its ultraeasy monetary policy as the coronavirus pandemic drags on.

The BOJ, in a surprise move at a two-day policy meeting, decided to launch a new program this year to provide funds to financial institutions for their investments or loans aimed at addressing the issue of climate change. An outline of the new measure will be unveiled at the next policy meeting in July.

To keep borrowing costs low, the Japanese central bank will continue to set short-term interest rates at minus 0.1 percent while guiding 10-year Japanese government bonds at around zero percent.

Ideas:

In the wake of the current situation, with pandemic and the Japanese economy not doing so good, it was probably a good ideas that the Bank of Japan keep the short-term interest at minus 0.1 percent.

And at the same time help financial institutions as sometimes they are forgotten in the BOJ's easy money policy. Sometimes it is forgotten that they too have make a profit to stay in business.

The idea of climate change has finally been realized in Japan as we massive floods, massive white outs, or huge snow storms, the Shizuoka landslide, and the extended heat wave.

Even insurers are now trying to figure out to address the climate change situation.

Article:

It made no change to the pledge to buy exchange-traded funds when needed, with the annual upper limit set at 12 trillion yen ($109 billion).

"Japan's economy has picked up as a trend, although it has remained in a severe situation due to the impact of COVID-19 at home and abroad," the BOJ said in a statement, maintaining its previous assessment.

The BOJ appears to be in no hurry to dial back its crisis-mode monetary stimulus as the economy remains on shaky ground and its 2 percent inflation target is still far off, in stark contrast with the United States and some European countries where concerns about inflation have grown.

Ideas:

Some parts or sectors in the Japanese economy may be picking up but many parts or sectors are still not doing so good.

And economy is very complex, all sectors never grow or change in a linear fashion, as all up or all down. There are always going to be some going up and some not doing so good.

But that is what a market economy is all about. There are always going to be up and downs.

With the pandemic some of the downs are extreme of course and some ups might seem extreme because of some industries are being created or new businesses in an industry are being created to fit the needs and demands of society.

The Bank of Japan, and its goal of  2 percent inflation just doesn't seem to make sense right now as consumer demand is not where it should be at this time.

As the same time, the US, with more of a free spending consumer society, inflation might be a problem in the future. But Japan, while consumer spending is estimated to be around 50 percent of GDP just doesn't have the same spending mindset that US consumers do.

Because of that Japan may never reach the Bank of Japan's goal of 2 percent inflation.

Article:

The U.S. Federal Reserve signaled Wednesday that it may start raising interest rates earlier than expected in 2023.

Japan's core consumer price index, excluding volatile fresh food items, rose 0.1 percent in May, marking the first increase in 14 months, government data showed earlier Friday, providing relief to the BOJ.

The pandemic has moved the 2 percent target further away, prompting a fine-tuning of the BOJ's toolkit in March in preparation for longer-than-expected easing. The target is unlikely to be attained even when Kuroda's current term ends in April 2023, according to BOJ projections.

Ideas:

The ideas that the US federal reserve in thinking of raising the interest rate in 2023 might seem like a good time to do it. If they tried to do in the summer of 2021, now, it might be too soon, as the virus situation has started to spiral out of control again.

But even more importantly, the US economy, like all economies is very complex as there are some areas doing much better than other sectors industries.

And there are still millions of people/families that have not been able find jobs that they lost. 

Japan's core consumer price index increase of 0.1 percent is nothing to get excited about, even though its the first increase in 14 months.

No matter what the BOJ tries, as the present time, the 2 percent goal might not be attainable, as Japanese consumer demand is just not there.

Also the services industry is just too far down and until both consumer demand and the services industry improve, the 2 percent goal might be out of reach for now and in the near future.

Article:

The year-on-year change in the core CPI is expected to stay around zero "in the short run" but will gradually rise thereafter, the BOJ said, while acknowledging "high uncertainties" over the consequences and the impact of the pandemic.

Governor Haruhiko Kuroda is scheduled to hold a press conference later in the day to explain the central bank's decision.

Climate change has become one of the key topics for central bankers as momentum is building toward decarbonization to help reduce global warming.

Ideas:

Whether short run or long run the core CPI probably won't change much anytime soon. There just isn't enough consumer demand at the present time or in the near long term to change it.

There are still too many uncertainties for sure as the pandemic continues to drag on.

Those businesses, whomever they are, which have been hanging on, hoping for an end in the pandemic, eventually might have to shut or reduce operations even more. Even with the Japanese government subsidies they are receiving it might not sustain them.

Everyone now seems to be thinking about climate change and what to do about it. For example, the EU has come out with even stricter emissions standards and many carmakers around the world are not happy about it. Essentially the EU wants to get rid or gasoline type cars by 2035, if that is the correct date, and carmakers are not happy.

Article:

Japan, under Prime Minister Yoshihide Suga, has been sharpening its focus on green growth with its pledge to bring carbon dioxide emissions to net zero by 2050.

"Climate change issues could exert an extremely large impact on developments in economic activity and prices as well as financial conditions from a medium- to long-term perspective," the BOJ said.

Kuroda said earlier that central banks should be flexible in designing policies toward a greener society and the BOJ would explore actions and take necessary steps on climate.

Ideas:

The idea of a greener society now is the major trend everywhere. But it takes new technologies and it takes money to transform a society and an economy, and it takes time.

And at the same time there is going to a lot of resistance to change. Maybe not so much from society itself, as the change might feel gradual to them or even not very noticeable, but any business that is rooted in the carbon style industries such as the coal sectors, the oil sectors, the auto sectors or any other sectors or business is going to resist as long as they can.

Cost in the short term might be too much and as such governments and societies will need to change and try to figure out the best way to transform to a greener society without disrupting the present economy or society too much.

Have a nice day and be safe!