Richard Katz
TOE Alert: Financial Market Mayhem
written by Richard Katz on February 09, 2016
Key points for Richard Katz's TOE Alert include: - Stock prices fell 5% on Tuesday and another 2.4% Wednesday morning to the lowest level since Kuroda’s “monetary bazooka” of October 2014; - The yen stands at ¥114.6/$, the strongest level since October 2014; - Yields on JGBs out to ten-year maturity are now in negative territory, for the first time; - Banks, pension funds, insurers all invest heavily in JGBs; - Banks have already made big cuts in the rates they pay depositors, but are not expected to go into negative territory for households or SMEs; - All this means a squeeze on earnings at banks, insurers and pension funds
Kuroda Goes Negative on Interest Rates - Monetary ‘Hail Mary’
written by Richard Katz on February 05, 2016
Richard Katz's February 2016 issue of the Oriental Economist
BOJ Tried a Bazooka with Negative Rates, but It's Just a Pop Gun
written by Richard Katz on January 29, 2016
Followings are the key points fro this report, - BOJ tried another surprise “bazooka” but only managed a pop gun - Will apply a “negative interest rate” of 0.1% on new deposits of “excess reserves” held by banks at the BOJ - Hope is that it will get banks to lend more and thereby boost company investment and consumer spending - It won’t work: problem is not banks unwillingness to lend, but business/firm unwillingness to borrow
Raising Profits without Raising Sales - What's the Bottom Line?
written by Richard Katz on January 22, 2016
Japan’s firms, particularly its 5,000 largest firms, have mastered the art of producing growth in profits without growth in sales. They’ve done this by cutting costs, particularly labor costs.
TOE Alert: Japan's Nikkei 225 stocks move in line with S&P, DAX and FTSE
written by Richard Katz on January 14, 2016
We’re no experts on stock markets, but it does occur to us that the gyrations of Japan’s stock prices over the past six months may say less about the fundamentals of Japan’s economy than about the ups and downs of sentiment on all four of the major bourses in rich countries: the Nikkei 225, S&P 500, FTSE (London) and DAX (Frankfurt).
TOE Alert: Machinery Orders up a Lot, But Beware of Monthly Gyrations
written by Richard Katz on December 09, 2015
Japan-watchers got very excited because core private machinery orders in October were up 10% on a month-on-month basis, However, the monthly movements in orders have very large gyrations, even though the most volatile elements are removed from core orders. Bottom line: core orders could be a genuine “green shoot,” or one month’s surprising number may be misleading us.
Getting to 2% Real Growth Productivity Revolution
written by Richard Katz on December 04, 2015
Richard Katz's December issue of the Oriental Economist includes reports of Getting to 2% Real Growth Productivity Revolution, How Much Productivity Growth is Needed? Talk with MOF’s Top Official, Japan's Software Industry - What Went Wrong? Taking the Lead on Climate Change - New Energy Model for PRC, Development Aids Climate Goals, and Cheap Yen, Lots of Buying - Tourism Explodes.
TOE Alert: Is Japan's Potential Growth Really As Low as 0.5%, Part 4
written by Richard Katz on December 01, 2015
One way to boost labor productivity, and thus potential growth, is to give each worker more tools, and this Japan has done. Over the long haul, however, it is ever more important to give workers “smarter” tools, e.g. moving from animal-pulled plows to tractors, from the stand-alone PC to the Internet. And it is important for companies to use those smarter tools up to their full potential. On this front, as we will detail today, Japan falls short.
TOE Alert: Is BOJ right that Japan's potential growth is as low as 0.5%? Part 1
written by Richard Katz on November 18, 2015
We pointed out in our Nov. 16 Alert that Japan’s GDP has grown at a mere 0.6% annual pace in the nearly four years since early 2012,but our gut feeling is that the BOJ’s figure is too pessimistic, and the purpose of today’s Alert is to explore that question.
TOE Alert: Is Japan's Potential Growth Really Just 0.5%, Part 2
written by Richard Katz on December 24, 2015
In our Alert of Nov. 18, we began looking at whether Japan’s potential growth is really as low as the 0.5% rate asserted by the Bank of Japan (BOJ)? Our gut feeling is that the BOJ is too pessimistic and that potential growth is more likely around 0.8%-0.9%, more or less the same as for the last quarter-century.
