Japan

Japan's financial regulator will closely monitor how central bank policy impacts regional banks, as the world's third-largest economy approaches the normalisation of its monetary settings after years of massive easing, Reuters reported. The Financial Services Agency (FSA) "will monitor how potential changes in the financial markets and client situations will affect regional banks' profits and health," the regulator said in its annual policy outlook released on Tuesday.

Bank of Japan Governor Kazuo Ueda said the pace of economic activity in China has been a disappointment that could cloud Japan's economic outlook, Reuters reported. China's July data, such as retail sales, business investment and industrial production were "on the weak side," Ueda said, according to the text posted on the BOJ's website on Monday.

The Bank of Japan is purchasing government bonds at a record pace this year, a factor that likely prompted its recent move to allow larger yield movements so as to reduce the strain on its control of longer-term interest rates, the Japan Times reported. Doubling the effective cap on benchmark yields in December and again last month has yet to significantly reduce the BOJ’s bond buying, raising the possibility that more changes will be needed to help rein in purchases.

Japan’s economy recorded impressive growth in the second quarter of 2023, government data showed on Tuesday, evidence that the country is finally recovering from the Covid doldrums, even as signs of significant challenges remain, the New York Times reported. Economic output in Japan grew by an annualized rate of 6 percent in the second three months of the year, the country’s Cabinet Office said. It was the third consecutive quarter of expansion, following a revised reading of 3.7 percent growth in the January-to-March period and a slight bump of 0.2 percent the quarter before that.

Kiyoshi Hashimoto's machinery factory outside Tokyo should be buzzing with industry. Instead, it's so quiet you can hear him practising the recorder. The 82-year-old entrepreneur founded his company nearly 40 years ago, but well past retirement age he has neither a successor nor a buyer for a business that retains loyal clients, the Japan Times reported. It is a problem that Japan's government warns could affect up to a third of all small businesses in the country by 2025, as the country's population shrinks and ages.

Two of Japan’s largest lenders posted profits that beat analysts’ forecasts in their fiscal first quarter, marking a solid start to the year that is projected to deliver bumper results, Bloomberg News reported. Sumitomo Mitsui Financial Group Inc. said net income for the quarter ending June 30 was 248 billion yen ($1.75 billion), above an average estimate of 236.1 billion yen by six analysts. This was about 1.8% lower than the same period a year ago.

The dovish Bank of Japan faced a tough two-day policy-setting meeting that started Thursday due to potentially changing inflation dynamics, with edgy financial markets seesawing over whether its controversial yield cap program will be modified. The BOJ is widely expected to revise upward its earlier inflation forecast for the current fiscal year to next March, given more evidence that price hikes, initially prompted by surging fuel and raw material costs, have been broadening in a notable change for the once deflation-mired nation, the Japan Times reported.

Some 27 percent of nursing homes and related service facilities in Japan may go bankrupt or shut down operations in a few years if soaring prices and utility costs continue to put pressure on them, according to a survey by nursing care groups, Kyodo News reported. "Nursing care facilities are not able to pass along cost increases to consumers in the same way as other companies, and this has a significant impact on their business," said an official of Minkaikyo, an association of nursing care providers.

Japan's factory activity contracted in June after expanding for the first time in 7 months in May, a private survey showed on Monday, dragged down by weak orders for cyclical goods amid a global economic slowdown, Reuters reported. The final au Jibun Bank Japan manufacturing purchasing managers' index was at 49.8, returning below the 50.0 threshold that separates growth from shrinkage, after May's 50.6 reading. Output and new orders, the subindexes that constitute the majority of the headline index, fell back to contraction, ending a brief rebound buoyed by improved business confidence.