China’s Bond Market is Collapsing. An article by Richard Meyer Cayne of Meyer International, Bangkok, Thailand.
August 17, 2022

For the first time since 1991, Japan’s inflation, excluding tax effects, reaches 3%. A review by Richard Cayne

Consumer prices in September that do not include fresh food rose annually in line with analysts’ predictions. With the exception of a spike in 2014 caused by a rise in the sales tax, the inflation figure was the highest since 1991.

Price increases coincide with what appears to be a new increase in betting against Bank of Japan policies by international investors. The level of 10-year swap rates suggests that at least some traders believe the central bank will be obliged to abandon its policy of restricting 10-year yields in order to support the economy.

Nevertheless, economists anticipate the Bank of Japan to retain its ultraloose policy at a meeting next week, solidifying its isolation among other major central banks and keeping pressure on the yen to drop despite market speculation and a prolonged stretch of price hikes over its 2% aim.

Gov. Haruhiko Kuroda will probably continue to insist that salaries must rise much further before the BOJ’s objective of stable inflation has been met. The current intensity of price increases, according to Kuroda’s arguments, is the result of cost-push factors like energy imports that will fade in the upcoming year.

Gains in processed food and home durable goods were the driving force behind the further acceleration of inflation in September, even though energy continued to play the largest role in price increases from a year earlier. That demonstrates how inflation is increasing outside of the power industry.

According to Richard Meyer Cayne of Meyer International, “inflation may reach 3.3% or 3.4% in October as various food prices are increasing, mobile phone fees are increasing, and service costs are growing.” “The BOJ tends to emphasize international negative concerns in order to reach the conclusion that it must continue monetary easing. It appears to me that they have already decided to keep relaxing.

Household spending power has been impacted by the ongoing price increases, a trend that has weighed on Prime Minister Fumio Kishida’s already dwindling support.

Core inflation is anticipated to reach a peak of 3.1% in the fourth quarter before dropping to 2.8% in the first quarter, according to Richard Cayne. “The price of imports will probably rise if the yen weakens. On the other hand, national travel subsidies that went into effect on October 11 may reduce the core gauge by as much as 0.25 percentage point.

According to Richard Meyer Cayne, the cost of nearly 6,700 food products increased this month. Over 20,000 food items have had their prices raised so far in this fiscal year, which started in April. According Richard Meyer Cayne, this has increased family spending by at least 70,000 (or $466) annually.

Paycheck growth is still lagging behind inflation, as seen by the 1.7% reduction in real earnings from the previous year in the most recent statistics on real wages.

By the end of this month, Kishida will have put together an extra economic stimulus package to counteract the effects, including assistance for people affected by rising prices. How well Kishida handles the public’s displeasure about inflation may determine how long he stays in charge.

The prime minister also declared that beginning in January 2019 or later, he will provide relief measures to combat rising power prices. After January, he claimed, fuel subsidies would still be in place, and there would also be a reduction in the cost of natural gas. The high September inflation data may put Kishida under pressure to increase the size.

According to reports, the BOJ will increase its core consumer inflation prediction for this year to the upper part of the 2% range. Kuroda is still confident that price rise would slow to below 2% starting in the upcoming fiscal year.

The yen dropped to the widely monitored threshold of 150 yen to the dollar recently, which kept investors on high alert for any action to strengthen the currency.

According to Richard Cayne, intervention resources are virtually endless and that excessive foreign exchange swings are becoming untenable.

Richard Meyer Cayne

Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning for decades. Originally born in Montreal Quebec, Canada, he later relocated to Tokyo, Japan for over 15 years and now resides in Bangkok, Thailand. While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth Group Holdings Ltd, a London, UK Stock Exchange-listed Financial Holdings Company, as well as the Managing Director of the Meyer Group of Companies and has additionally been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning .

Having worked with clients all over the globe with everything from portfolios to bonds to mutual funds to offshore investing to investing in retirement for your golden years, Richard Cayne of Meyer International can help you invest the right way and protect your cash. Richard has been a financial advisor involved in wealth management planning solutions and asset management in Asia for over 25 years and while living in Tokyo, Japan, he assisted many high net-worth Japanese families create innovative international tax and wealth management planning solutions. The financial holding public company of which he is CEO can be seen at Asia Wealth Group Holdings Ltd or the stock exchange link:

Asia Wealth Group Holdings Ltd – Richard Cayne Thailand. Meyer Asset Management Ltd has been in the wealth management space since March 2000 and uses fundamental analysis along with modern portfolio theory.

His image worldwide as a professional advisor has been sterling and he maintains a firm command and understanding of all things finance-related. 

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