-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI INSIGHT: JGB Buy Limit End Shows BOJ Ready To Act On NPLs
--Growing BOJ Policymaker Concern Over Bank NPLs
By Hiroshi Inoue
TOKYO (MNI) - The Bank of Japan's removal of the upper limit on its
potential JGB purchases was to future-proof itself against the possibility the
Japanese government will look to issue increasing amounts of bonds if there is a
need to inject public funds into an ailing banking system, MNI understands.
Although there are no immediate concerns for the banks, there is a growing
concern at the BOJ that the longer the current virus-driven crisis persists, the
greater the drain will be on company finances across the country, which will
inevitably lead to some corporate failures and an increase in non-performing
loans for Japan's banking sector.
Nor are companies set for cash shortages any time soon, as record profits
in recent years have helped firms build their cash reserves, but more than a few
months of the economy operating at the current reduced levels will impact their
financial position.
--FUNDING ISSUES
Recognizing this, the BOJ has increased its purchases of commercial paper
and corporate bonds to ease funding problems for major companies attempting to
boost liquidity levels and the central bank continues looking for ways to boost
the flow of credit to the real economy.
If the current situation doesn't improve significantly over next two
quarters, many firms will face more serious funding challenges and commercial
banks would face growing concern over bad debt and calls for government bailouts
would grow louder.
There is no government policy yet in place to push such bailouts through,
but the BOJ thinks it is getting in a place where it would be able to react to
easing pressures across financial markets if funding needs increase sharply.
--SENTIMENT SHIFT
The BOJ has long wanted to remove the pledge to buy up JPY80 trillion
annually from its policy statement seeing it as redundant with annual purchases
running at less that JPY20 trillion, but it short of doing so fearing such a
move could be misread as a pull back on its easy policy.
However, it has now decided it can be removed, as pandemic-driven market
sentiment would no longer consider such a move a shift to a tighter policy bias.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: MMJBJI,MMJBJ$,M$A$$$,M$J$$$,MT$$$$,MX$$$$]
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.