Let's run the inflation numbers for Tokyo because they came in harder than
expected. Now we're wondering what kind of
inflation forecast the be under whether his first meeting might have.
If they show expectations, somewhat higher inflation.
First of all, what what is this hot CPI number for Tokyo telling us?
Yes. So it's mainly coming from food.
60 percent, though, is three point five percent inflation, comfort food.
Another 10 percent comes from eating out.
So already they get to food. However, I can see they're just
spreading out this price hike spreading out into the Saudi season in various
sectors. So I think this gives out the pressure
to what Bank of Japan and then they make people everybody start to say big issue
that starts in normal tighten monetary easing, because this is a very high
ratio and it partly come from the depreciation.
So you're concerned about demand. A lot of people, including at the Bank
of Japan, are concerned about demand that this is too supply driven, not
enough demand driven. Why?
So it's purely commodity based. And if you look at the demand, a demand
side, for example, consumption is through the services.
Consumption is picking up, but from low level.
But if you look at, say, who've come through the consumption or a close
consumption. Those that stay stagnant, actually food
consumption in the other times is dropping.
So people try to save because it's a rising cost.
So this is a clear sign that this is not a demand dribbling inflations and
therefore not sustainably and stable above 2 percent target to be always
looking for. Clearly, if you look at the commodity
prices, you know, contract prices, crude and all commodity prices.
Now we see some declining tendency. But how about due to the yen,
depreciation is still quite high. But you know, I think, you know, you
better really start to see a slowdown in inflation.
So I think the bank was up ISE right through at the end of RTS.
We'll start to see inflation to either beat or 2 percent.
And yet markets, investors are everybody is hearing the same thing.
You're seeing the same numbers. They can just what you said, many see
that argument. And yet many market participants are
still waiting, eager thinking something if it doesn't happen at this meeting.
Sure, it could happen as soon as June. They're going to start tweaking.
Why? C, they're going to do something.
Why are they? What do you make of this push?
Yes, but this time it's very interesting.
It looks like a concerted effort, no market in banking sector and tried to
encourage Veolia to normalise it. I think it's partly because it's why
Sisi was introduced in 2016. The Interstate Marty Solo and, you know,
very sluggish. And then like now, you know, because of
the Beatles, he hasn't heavy involvement in the government bond market, almost no
liquidity DAX. So not much transactional.
So from a financial perspective, they can make out all the money so they don't
want another five years to stay with this situation.
So right now is about 2 percent.
It's a good opportunity for your day to, you know, to normalize it.
However, it's a bit to. It's contrary to what the son said.
He wants to make sure that any relation to these 2 percent in a stable manner.
That hasn't been realized. It has a way that maybe given this some
comments, though, that a bit confusing because.
Oh, sure. He sure.
Inflation is going to come down. Too early to do anything.
And yet there do seem to be a door open to C C because a bond market
functioning, those kinds of things that you get a mixed message.
Yeah, I think so, because he keeps saying that 2 percent price stability is
the most important thing here to maintain monetary easing until he would
achieve 2 percent. He's stable manner.
In the meanwhile he's there. He's he's good at.
Pay attention to the side effect. So if monetary easing have to be
continued, he'll try to take it away. But what does it mean to be easy, like
expanding to eat a target? Well, short, we need two five year yield
or, you know, some some tweak, but that is already a single normalization.
Right. It is going to be contradictory to the
statement that he is going to maintain that easing.
So we don't know what exactly he stopped talking about, where he say he would
take care of side effect. So in a funny way, it seems that this is
a very important day for governor waiter.
Does he need to try to give us a clear sense of what it is he's trying to say?
When does normalization start? Does it start when you start adjusting
yield curve control and when does that happen?
Or does it not happen until you raise the negative rate, which people say
couldn't happen for a couple of years? So on April 8th, you know, that press
conference, he said he's not going to normalize monetary easing or make big
changes to the way Sisi just because I say the fifth are deteriorating.
He said he would look at the underlying inflation.
He said that he should stick to that. So he should try to explain what's
happening to the underlying inflation. It's not coming from the demand side.
So he should show the data and it's right to have a convincing argument
rather than talking too much about side effect.
When do you think that the Fed sees me that Bank of Japan is?
To start making these changes actually starting to change the policy change
wise. You see it's very difficult to see and
not see us. And then next year go next year,
inflation will come down clearly below 2 percent.
It's very challenging. Will be you'll get to make an
adjustment. I think it takes a couple of years to
see that I mean, traditionally early and get stronger
and cut based on current informations.