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EU energy chief: This crisis is more serious because it involves petroleum products.The EUs energy chief stated: "We are better equipped to handle this crisis than we were in 2022 because we have reduced our natural gas consumption. We are now using 18% less natural gas than we did in 2022."Indian Trade Minister: The US trade agreement will not harm any sensitive interests of farmers or any other stakeholders.On October 29th, OCBC strategists Sim Moh Siong and Christopher Wong pointed out that the Reserve Bank of New Zealands unexpected decision to keep the official cash rate unchanged at 2.75% caused the New Zealand dollar to fall. However, policymakers still signaled further tightening of monetary policy in the future; therefore, this decision is more like a temporary pause in rate hikes than a shift to a dovish stance. The Reserve Bank of New Zealand stated that further tightening of monetary policy may still be needed in the future, but the specific timing will depend on economic data. Market focus has now shifted to December. We still expect the Reserve Bank of New Zealand to raise interest rates once more in December and once more in the first quarter of 2027, which should limit further declines in the New Zealand dollar.1. Wells Fargo: Expects the ECB to keep the deposit rate unchanged at 2.50%. The focus of the meeting will be whether the ECB signals that "tighter funding conditions require more patience," while maintaining policy flexibility without completely closing the door to rate hikes. We still consider a December rate hike as our baseline scenario. 2. MUFG: Expects the ECB to keep the deposit rate unchanged at 2.50%. With rising sovereign bond yields and overall tightening financial conditions, policymakers have reduced their urgency to act. Our baseline scenario remains a further 50 basis point rate hike, with the next rate hike expected in December. 3. Danske Bank: Expects the ECB to keep the deposit rate unchanged at 2.50%. We expect the ECB to implement its final 25 basis point rate hike in December, bringing the deposit rate to a peak of 2.75%, and maintaining that level throughout 2027. It is worth noting whether Lagarde will formally announce her early resignation. 4. Morgan Stanley: We expect the ECB to keep interest rates unchanged, primarily because policymakers need more data to reassess their current policy stance. We expect the ECB to signal that it is closely monitoring changes in sovereign bond yields, but is not yet concerned to the point of needing a direct policy response. 5. Rabobank: There are currently no signs that energy inflation is spreading to the broader areas of wages and price setting. The ECB does not need to accelerate its rate hikes and can wait until December to take action. 6. Nordea: We expect the ECB to keep interest rates unchanged, with the next rate hike likely in December. Market focus is on how the ECB will respond to the sell-off of French government bonds and tightening financing conditions. The baseline forecast remains that the ECB will raise interest rates by 25 basis points each in December and March 2027, bringing the deposit rate to 3.00%. 7. Nordea Bank: We expect the ECB to keep interest rates unchanged. Based on recent statements from officials and current market pricing, a 25 basis point rate hike in December remains the baseline scenario, with another 25 basis point hike possible in March next year. The October meeting is more likely to be seen as a "mid-term checkpoint" between the two rounds of macroeconomic forecasts in September and December. 8. Brown Brothers Harman: Expects the European Central Bank to maintain its deposit rate at 2.50%. Underlying inflation in the Eurozone and tightening financial conditions have given policymakers room to wait; however, resilient economic activity and the expectation that inflation will remain above target for an extended period solidify the expectation of a December rate hike to 2.75%.

Exec Director of the Bank of Japan Refuses to Launch CBDC for Negative Rates

Cameron Murphy

Apr 14, 2022 10:49


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The CBDCs will not be utilized to attain negative rates, according to Bank of Japan Executive Director Shinichi Uchida.


Another BoJ officer indicated in February that CBDCs might harm the economy.


Other banks and businesses in the nation are working on their own stablecoins.


As Japan continues to build its own Central Bank Digital Currency (CBDC), the central bank that will issue it is expressing reservations.

Japan Opposes CBDC in Part, but Not Completely

According to Reuters, Bank of Japan Executive Director Shinichi Uchida indicated that if a digital currency of the Japanese Yen is meant to be used to produce negative rates, the central bank would not launch it.


Recently, Japan started testing the possibility of establishing a CBDC within the next four years, and there has been back and forth among economists in the nation.


Regardless, the central bank is still experimenting and testing new functions.


The tests are now in their second phase, and the Bank of Japan intends to investigate the possibility of imposing a transaction and HODLing restriction on the CBDC.


The bank is also considering whether or not the CBDC should be converted into an interest-bearing asset. However, according to Uchida, doing so might lead to the CBDC becoming a bank deposit alternative. "While the concept of employing such a feature as a method to create a negative interest rate is frequently debated in academics, the Bank will not establish CBDC on this premise," he said, adding to the worry over negative rates.

CBDC-Related Issues

While Uchida was against negative rates, Hiromi Yamaoka, the former head of the Bank of Japan's financial settlement department, warned that CBDCs may ruin the economy.


Hiromi agreed that payment systems should be digitized, but he opposed utilizing a CBDC to do it. "Some argue negative interest rates may operate more successfully with a digital currency, but I don't think so," he said of his reservations about negative interest rates.


Companies and institutions, on the other hand, are developing their own currency offers in the meanwhile，A Japanese trading firm, aims to issue a gold-backed cryptocurrency in the nation.


Even though it will serve as a stablecoin, it will be tethered to the value of 1 gram of gold rather than the Japanese Yen.


While the "stablecoin" is a viable investment option, it pales in comparison to what a real stablecoin or CBDC can do. As a result, the Bank of Japan estimates that the nation will have to wait until 2026 to receive its own digital currency.

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