Asset Management One Co., Ltd.

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1473

Need to pay attention to whether inflation triggered by yen depreciation may raise inflation expectationsThe risk there is that it may also raise underlying inflationBOJ will continue to raise policy rate in response to economic, price, financial developmentsJapan has clearly entered into inflationary phaseWhat is vital now is to ensure that underlying inflation does not exceed 2%, managed by appropriate policy settingJudged that the situation did not warrant a hasty decision to raise interest rates during April meeting More to come..

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Simplex Financial Holdings Co., Ltd.

Pro Ultr Yen

BlackRock, Inc.

Pro Ultrshrt Yen

Currencyshares JPY Trust

BOJ policymaker Masu warns that yen depreciation may raise inflation expectations

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Japan's government is considering an additional budget to ease the financial burden on households due to rising fuel costs. This potential supplementary budget may increase government borrowing, impacting the fiscal situation. Following the news, yields on Japan's long-term government bonds rose. Prime Minister Sanae Takaichi had previously stated that existing funds were adequate for current fuel subsidies, downplaying the need for an additional budget.

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Huaan MUFG N225 ETF(QDII)

Japan Considers Additional Budget to Ease Fuel Cost Burden

Japan's government is considering a supplementary budget to alleviate rising household fuel costs ahead of summer, according to Kyodo News. This potential extra spending aims to support families facing high gasoline prices and utility bills. Following the report, yields on 30- and 40-year Japanese government bonds increased due to fears of higher debt issuance. However, Prime Minister Sanae Takaichi and Chief Cabinet Secretary Kihara have downplayed the necessity of such a budget, leaving its status uncertain. The situation reflects concerns over Japan's fiscal sustainability amid rising global crude prices.

- The Japanese government is considering a supplementary budget to alleviate increased fuel costs for households during the summer, according to sources from Kyodo News.  
- This potential measure reflects concerns over rising oil prices and utility bills, with bonds' yields for 30-year and 40-year Japanese government bonds rising due to anticipated debt issuance.  
- The prime minister has downplayed the need for such a budget, suggesting current subsidies are adequate, creating uncertainty around the plan's status while highlighting the market's sensitivity to fiscal changes.

Japan weighs supplementary budget to shield households from fuel price surge

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IJPH

513520

1369

The Nikkei 225 closed above 63,000 for the first time, marking a significant milestone amid market uncertainty. TOPIX companies are expected to achieve nearly 6% profit growth, fueled by demand for AI and gains in the banking sector. Additionally, Japanese investors sold foreign stocks in April due to concerns over inflation and energy costs.

Mitsubishi UFJ Financial Group, Inc.

iShares MSCI Japan GBP Hedged UCITS ETF (Acc)

Sumitomo Mitsui Trust Holdings, Inc.

ChinaAMC Nomura N225 ETF(QDII)

Lyxor Japan (TOPIX)(DR) UCITS ETF

Invesco MSCI Japan UCITS ETF

Nikkei closes above 63,000 as profits, AI demand lift stocks

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Japanese investors sold foreign stocks in April for the first time in four months, divesting a net 636.4 billion yen ($4.04 billion) due to rising energy costs and inflation concerns. This marked the largest monthly net sales since October 2025. While selloff in foreign bonds eased to 219.2 billion yen, trust accounts withdrew 1.85 trillion yen from foreign stocks, the biggest pullout since June 2025. However, investment trust management companies and life insurers were net buyers of foreign stocks, investing 1.25 trillion yen and 333.1 billion yen, respectively.

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Kyodo Printing Co., Ltd.

Japanese investors sell foreign stocks in April as energy costs rise

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Japan's Economic Watchers Current Conditions Index for April was reported at 40.8, falling short of the expected 41.5, according to Jin10. The previous value for the index was 42.2, indicating a decline in economic sentiment.

CSOP NIKKEI225

Japan's April Economic Watchers Current Conditions Index Falls Short of Expectations

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Japan's LDP Digital Headquarters discussed a next-generation finance proposal focusing on stablecoins and tokenization. Takuya Hirai emphasized AI and blockchain's role in automating finance and warned that the rise of dollar stablecoins could threaten Japan's economic security and monetary sovereignty. The LDP plans to foster public-private collaboration to enhance on-chain infrastructure development.

Japan Agricultural Cooperatives Group

Japan's LDP Discusses Next-Gen Finance Proposal Amid Stablecoin Competition Concerns

Bank of Japan policymakers are considering raising interest rates due to concerns about rising inflation linked to geopolitical tensions, particularly in the Middle East. Despite the need for caution regarding Japan's economic recovery, there is a possibility of a rate hike at the next monetary policy meeting. The BOJ maintained its policy rate at 0.75% last month and raised inflation forecasts, with discussions on the frequency of future rate increases depending on inflationary pressures. The central bank aims to prioritize price stability amid rising costs.

- Bank of Japan policymakers expressed the need to raise interest rates during their April meeting, amid concerns about inflation from rising oil and gas prices due to the Middle East conflict.  
- Analysts predict cautious decision-making on rate hikes, as the geopolitical situation complicates Japan's economic recovery.  
- Although the policy rate was kept at 0.75%, board members suggested future increases may occur if inflation risks persist, emphasizing the importance of maintaining price stability.

MorningStar

BOJ Remains on Track to Hike Rates Hikes, Opinion Summary Shows

Japan's 10-year government bond yield reached a 29-year high of 2.540% following a hawkish summary from the Bank of Japan's April policy meeting. Some policymakers indicated a need for imminent rate hikes due to inflationary risks, with three board members dissenting for a 1.0% increase. Market sentiment is bracing for early interest rate hikes, although uncertainties from the Middle East conflict may weaken the upcoming bond auction. The 30-year and 40-year yields also saw slight increases, reflecting the overall market trend.

- Japan's 10-year government bond yield reached a 29-year high of 2.540% amid a hawkish stance from the Bank of Japan's April policy meeting.  
- Policymakers indicated the need for quicker interest rate hikes if inflation risks increase, influencing market expectations for upcoming bond auctions.  
- The Ministry of Finance planned a bond auction later, with analysts predicting softer results due to uncertainties from the Middle East conflicts, although high yields could attract investors.

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Okasan Securities Group Inc.

Bank of Japan

Japan's 10-year bond yield hits 29-year high after hawkish BOJ meeting summary

TOKYO, May 12 : Some Bank of Japan policymakers in April saw the need to raise interest rates soon, with one signalling the chance of accelerating the pace of hikes if inflationary risks heightened, a summary of opinions at last month's meeting showed on Tuesday. "It is quite possible the BOJ will raise interest rates from the next meeting onward, even if the future course of the Middle East conflict remains unclear," one board member was quoted as saying in the summary.

- In April, some policymakers at the Bank of Japan indicated the need to raise interest rates soon due to increasing inflation risks.  
- One member suggested that the pace of rate hikes might accelerate in response to these risks, despite uncertainty regarding the future of conflicts in the Middle East.  
- The summary of last month's meeting suggests that the Bank of Japan may begin to raise interest rates at the next meeting.

Asset Management One Co., Ltd.(1473.JP)