Japan

Japan's exports rose for a fourth consecutive month in January led by auto shipments to the United States, but if U.S. President Donald Trump goes through with a plan to impose hefty car tariffs, a sharp drop-off is likely, Reuters reported. The solid trade report came after Japan's GDP data released on Monday showed the economy grew faster than expected in the October-December quarter, strengthening the case for the central bank to continue raising interest rates.

Hawkish comments from the Bank of Japan and sticky inflation are lifting bond yields to multi-year highs and pushing forward rate hike expectations, shaking long-held views that rates would not rise much in the historically deflation-prone economy, Reuters reported. Mitsubishi UFJ Morgan Stanley Securities said on Monday that it now expects the BOJ to raise interest rates to 0.75% in July from 0.5% currently, instead of in October-December.

The pace of gains in Japan’s corporate goods prices accelerated last month to the fastest clip in 19 months, keeping the Bank of Japan on track for further interest rate hikes, Bloomberg News reported. The measure of input prices for Japanese firms rose 4.2% in January from a year earlier, the BOJ reported Thursday. The gain, led by agricultural products such as rice, was bigger than the consensus estimate of 4% and compared with a revised 3.9% advance a month earlier.

Japan’s financial regulator urged the country’s regional banks to pay closer attention to the risks of investing in so-called repackaged government bonds, Bloomberg News reported. At a regular meeting with regional bank heads on Wednesday, a senior official at the Financial Services Agency told lenders that they should make sure they have proper risk management in place for the financial instruments.

Tokyo has asked the U.S. government to exempt Japanese firms from U.S. President Donald Trump’s newly announced 25% tariffs on steel and aluminum, the Japan Times reported. “We have requested the U.S. government to exclude Japan from the scope of these measures,” Chief Cabinet Secretary Yoshimasa Hayashi said during a news conference Wednesday, adding that the request was made by the Japanese Embassy in Washington via diplomatic channels.

A hawkish member of the Bank of Japan’s policy board on Thursday called for potentially faster interest-rate increases, sending the yen to its strongest level against the dollar in eight weeks, the Wall Street Journal reported. In a speech to business leaders in Nagano prefecture in central Japan, Naoki Tamura said that the central bank should raise rates to 1% or higher in the fiscal half starting in October. That level is likely consistent with a neutral rate setting that is neither restrictive nor stimulating for the economy, he added.

Japan’s boom in management buyouts looks set for stricter oversight to protect minority shareholders when companies go private, the Japan Times reported. The Tokyo Stock Exchange will this month consider changes to the Corporate Code of Conduct that would require firms to improve disclosure of assumptions used to calculate the price of buyouts, and to set up a special committee to hear opinions about the proposed deal. The move shines a light on concerns of minority shareholders that have arisen as buyouts in Japan rose to the highest since 2011.

Nissan Motor and Honda Motor have hit a standstill negotiating the terms of a merger, announced less than two months ago, that would have created one of the world’s largest auto groups, the New York Times reported. Before their disclosure in late December that they were exploring combining operations, Nissan and Honda had discussed operating as partners under a holding company.

Underlying inflation in Japan is still slightly below the central bank’s target of 2%, Bank of Japan Gov. Kazuo Ueda said, underlining that it is in no hurry to raise interest rates, the Wall Street Journal reported. “Our goal is to achieve a moderate rise in prices accompanied by solid wage growth,” Ueda told a parliamentary committee on Friday.