9/14/21 Japan Galaxy News: Japan’s Wholesale Inflation Hovers Near 13-Yr High As Material Costs Rise; BOJ Is Quietly Unwinding Kuroda’s ‘Bazooka’ Stimulus

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1. Japan’s Wholesale Inflation Hovers near 13-Yr High as Material Costs Rise

According a report by Businesshala, Japan’s wholesale inflation rose to near a 13-year high in August as raw material imports continued to rise on solid global demand, data showed on Monday, leaving companies at home. Pressured to pass on the high cost. However, many analysts expect companies to moderate any price hikes as a situation of emergency restrictions to tide over the weight of the CCP virus pandemic on domestic demand.

The Corporate Goods Price Index (CGPI), which measures the price companies charge each other for their goods and services, rose 5.5% in August from a year ago, slightly below the average market forecast for a 5.6% gain. Data from the Bank of Japan showed. This was the sixth straight month of growth and was slightly down from the 5.6 percent increase in July, the fastest pace of growth since September 2008. The index, at 105.8, marks the highest level since 1982, when Japan’s economy was booming from an asset-inflated bubble.

2. Building Glass Prices Raised Against Background of High Raw Material Prices

Against the backdrop of high prices of raw materials and fuel, a number of major glass manufacturers are raising the prices of glass products for construction from next month, NHK reported on Monday.

AGC, one of the largest glass manufacturers in Japan, will raise the selling prices of glass products used in homes and buildings in Japan by 15% to 20% for ordinary flat glass and mirrors, 30% for flat glass with mesh for fire prevention, and 10% to 20% for double glazing with high thermal insulation performance, effective from the first of next month. The reason for the price hike, according to the company, is to cover the cost of renewing domestic production lines and investing in new facilities to promote decarbonization, in addition to the fact that the market prices of silica sand, a raw material, and heavy oil, a fuel for manufacturing facilities, have remained high as economic activities in the U.S. and China begin to normalize.

In addition to the above, Nippon Sheet Glass and Central Glass have decided to raise the prices of glass products for construction by 15% to 35% and 10% to 40%, respectively, from next month, and the trend to raise prices is spreading in the construction industry.

3. Vaccination of More than 50% of the Population 7 Months After the Start of Vaccination

NHK reported on Monday that the number of people in Japan who have completed the second dose of the vaccine for the new CCP virus has exceeded 50% of the total population, according to a Japan government summary. The government has indicated that it plans to complete vaccination of all those who wish to be vaccinated by early October or November.

According to the latest situation released by the government on 13rd, the number of people who have completed the second dose of vaccination is 6,447,713, which is 50.9% of the total population. In Japan, vaccination of medical personnel and others began in February of this year, and in about seven months, the rate has exceeded 50%. In addition, 7,985,876 people have received at least one dose of the vaccine, which is 63% of the total population.

The government has indicated that all those who wish to be vaccinated will be vaccinated by early October or November, and that they will use the proof of vaccination to ease restrictions on daily activities such as eating, drinking, events, and travel. The total population includes children who are under the age for vaccination. In addition, the actual number of vaccinations may be higher than this and may increase in the future.

4. Japan’s KDDI Teams up with SpaceX for Better Mobile Access in Remote Areas

According to Kyodo News, Major Japanese telecommunications service provider KDDI Corp. said Monday it has joined hands with SpaceX to provide better access to users on remote islands and in mountainous regions in Japan via the U.S. firm’s satellites. KDDI said it aims to deliver with Space Exploration Technologies Corp., founded by tech billionaire Elon Musk, high-speed, low-latency broadband internet via SpaceX’s Starlink satellites to 1,200 remote mobile towers as soon as 2022 so its rural customers can experience urban-level mobile connectivity.

Starlink is currently offering initial beta service to more than 100,000 users around the world and is continuing expansion toward global coverage. Customers of KDDI’s “au” mobile service will face no additional charges due to the new service, the company added. The Ministry of Internal Affairs and Communications has issued an experimental license to operate the ground station for Starlink service installed at KDDI’s Yamaguchi Satellite Communication Center in western Japan, according to KDDI.

5.Japan PM Hopeful Kishida Vows to Work with Democracies to Counter Communist China

Former Foreign Minister Fumio Kishida, a candidate to succeed Prime Minister Yoshihide Suga, vowed Monday to counter Communist China’s growing influence by working closely with the United States and other “like-minded” democracies, Kyodo News reported on Monday.

The special adviser would deal with CCP’s alleged human rights abuses against the Muslim Uyghur minority in the far-western Xinjiang autonomous region as well as its crackdown on Hong Kong’s pro-democracy movement, he said. Kishida’s policy is in line with U.S. President Joe Biden’s call for a multilateral approach to put pressure on the CCP and similar to the stance adopted by the Suga administration. Like Suga, Kishida emphasized the importance of ensuring peace and stability across the Taiwan Strait, where tension is rising.

“China must act appropriately and show responsibility to match its status as a global power,” he said, vowing to deepen the Japan-U.S. alliance and Tokyo’s strategic ties with Europe, Australia, India and others that share “common fundamental values” to counter Beijing. Still, the 64-year-old former LDP policy chief called for continued dialogue with Beijing as the two countries enjoy good trade and cultural relations.

6. How the BOJ Is Quietly Unwinding Kuroda’s ‘Bazooka’ Stimulus

After years of shock and awe-inspiring monetary stimulus, senior Bank of Japan officials are quietly dismantling the radical policies launched by Governor Haruhiko Kuroda. Hand-picked by then-prime minister Shinzo Abe to lift Japan out of economic stagnation, Kuroda implemented his “Bazooka” asset-buying program in 2013 by printing money to get the public out of a deflationary mindset. To double the speed can be promised. BOJ’s 2% inflation target in two years, Businesshala reported on 13th.

But years of heavy currency printing failed to increase inflation and drew heavy criticism for draining the bond market’s liquidity. In going back to interest rate targets, the BOJ acknowledged that reversing Japan’s deflationary mindset with the Wall of Money proved difficult – the first retreat from Kuroda’s radicalism. Making things difficult, in 2020 the CCP virus pandemic forced the BoJ to respond with more stimulus, including a plan to pump money through financial institutions to struggling smaller firms.

After months of internal debate, the BOJ resolved to buy the ETF at a set pace in March this year, saying it would buy assets only in times of crisis. It was the beginning of a sneak taper of risky property purchases. The March package was the most conclusive and comprehensive list of measures taken by the BOJ since the YCC to address the cost of Kuroda’s policies. With its policy instruments exhausted after years of radical stimulus, the BOJ is now entering areas that were once considered outside the purview of central banks.

【Himalaya Japan Galaxy- Alpha Planet】
Translator: 帆間知津
Proofreading: π&π

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