Bank of Japan to stand pat but wary of yen spike

TOKYO (Reuters) – The Bank of Japan is expected to refrain from easing monetary policy this week, with the yen's retreat from its record high and a resilient stock market allowing it to save for later its limited options to support the fragile economy.

But the central bank has not let its guard down and could choose to ease policy for a second straight meeting if U.S. recession fears push the dollar well below its record low hit last month and trigger a stock market sell-off.

Otherwise, the BOJ prefers to hold fire until October and wait for more clues on whether risks have heightened enough to alter its forecast that the world's third-largest economy will resume moderate growth this autumn after being tipped into recession by the effects of the March 11 earthquake and tsunami and the subsequent nuclear crisis.

Here are possible outcomes from the two-day meeting ending on Wednesday:

STAND PAT ON POLICY POSSIBILITY: HIGHLY LIKELY

The BOJ is sticking to its recovery scenario but feels that the global slowdown and stubbornly strong yen have heightened the risk of Japan's economy undershooting its forecast, with the fallout already showing in domestic factory output.

Still, it feels it has acted against such risks with last month's easing, and prefers to stand pat if markets stay calm.

The BOJ sees plenty of reasons to save its depleted policy arsenal for now. The Federal Reserve has signaled an expanding of monetary stimulus in September, which could drive up the yen again and hurt Japan's exports, already slowing from soft global demand.

Political pressure for action by Japan's central bank may also heighten next month, when debate on how to foot the bill for post-quake reconstruction starts in earnest under Japan's new premier Yoshihiko Noda.

All this makes it more likely the BOJ will consider easing policy in October rather than now.

MARKET REACTION: Markets will not react much unless Governor Masaaki Shirakawa signals a strong chance of monetary easing next month in his post-meeting news conference on Wednesday.

EASE POLICY BY BOOSTING ASSET PURCHASES POSSIBILITY: LESS LIKELY

Some central bankers have doubts whether Japan's economy will resume a recovery in the autumn, worried that the global slowdown may be more serious than initially thought. Friday's dismal U.S. payrolls data may have reinforced such concerns.

The government has already signaled that it wants the BOJ to do more as it maps out steps to help companies counter the strong yen. Motohisa Furukawa, economics minister in the new cabinet formed last Friday, says he wants the BOJ to consider easing policy further.

The BOJ is thus determined to quickly counter any adverse market moves that threaten the economy. That means it may act if concern over the U.S. economic outlook pushes the yen well beyond the record 75.94 yen to the dollar hit last month.

Still, it would take a very sharp rise in the yen accompanied by a tumble in Tokyo share prices for the BOJ to act now.

If the central bank were to ease policy it would likely boost its asset buying scheme -- which was topped up just last month -- by another 5 trillion yen ($65 billion), with most of the increase in government bonds and exchange-traded funds.

MARKET REACTION: Bond yields and the yen might fall while share prices rose, although the impact would be short-lived.

REVERT TO FULL-BLOWN QUANTITATIVE EASING POSSIBILITY: HIGHLY UNLIKELY

The central bank regards the asset buying scheme, targeting government bonds and a range of private debt, as its key monetary policy tool. But it can probably only top it up once or twice, given limits to how much more risk assets it can buy without hurting its balance sheet.

It is thus pondering alternatives. While the BOJ will not revert to old-style quantitative easing of targeting reserves parked at the central bank, it may consider buying government bonds more aggressively either by accepting debt with longer durations or significantly boosting the size of purchases.

This is not an immediate possibility but is rather an option that may emerge later this year if Japan experiences a severe economic downturn.

MARKET REACTION: The surprise move would knock down bond yields and the yen.

(Editing by Tomasz Janowski and Michael Watson)

View the original article here

Bank of Japan to stand pat but wary of yen spike (Reuters)

TOKYO (Reuters) – The Bank of Japan is expected to refrain from easing monetary policy this week, with the yen's retreat from its record high and a resilient stock market allowing it to save for later its limited options to support the fragile economy.

But the central bank has not let its guard down and could choose to ease policy for a second straight meeting if U.S. recession fears push the dollar well below its record low hit last month and trigger a stock market sell-off.

Otherwise, the BOJ prefers to hold fire until October and wait for more clues on whether risks have heightened enough to alter its forecast that the world's third-largest economy will resume moderate growth this autumn after being tipped into recession by the effects of the March 11 earthquake and tsunami and the subsequent nuclear crisis.

Here are possible outcomes from the two-day meeting ending on Wednesday:

STAND PAT ON POLICY POSSIBILITY: HIGHLY LIKELY

The BOJ is sticking to its recovery scenario but feels that the global slowdown and stubbornly strong yen have heightened the risk of Japan's economy undershooting its forecast, with the fallout already showing in domestic factory output.

Still, it feels it has acted against such risks with last month's easing, and prefers to stand pat if markets stay calm.

The BOJ sees plenty of reasons to save its depleted policy arsenal for now. The Federal Reserve has signaled an expanding of monetary stimulus in September, which could drive up the yen again and hurt Japan's exports, already slowing from soft global demand.

Political pressure for action by Japan's central bank may also heighten next month, when debate on how to foot the bill for post-quake reconstruction starts in earnest under Japan's new premier Yoshihiko Noda.

All this makes it more likely the BOJ will consider easing policy in October rather than now.

MARKET REACTION: Markets will not react much unless Governor Masaaki Shirakawa signals a strong chance of monetary easing next month in his post-meeting news conference on Wednesday.

EASE POLICY BY BOOSTING ASSET PURCHASES POSSIBILITY: LESS LIKELY

Some central bankers have doubts whether Japan's economy will resume a recovery in the autumn, worried that the global slowdown may be more serious than initially thought. Friday's dismal U.S. payrolls data may have reinforced such concerns.

The government has already signaled that it wants the BOJ to do more as it maps out steps to help companies counter the strong yen. Motohisa Furukawa, economics minister in the new cabinet formed last Friday, says he wants the BOJ to consider easing policy further.

The BOJ is thus determined to quickly counter any adverse market moves that threaten the economy. That means it may act if concern over the U.S. economic outlook pushes the yen well beyond the record 75.94 yen to the dollar hit last month.

Still, it would take a very sharp rise in the yen accompanied by a tumble in Tokyo share prices for the BOJ to act now.

If the central bank were to ease policy it would likely boost its asset buying scheme -- which was topped up just last month -- by another 5 trillion yen ($65 billion), with most of the increase in government bonds and exchange-traded funds.

MARKET REACTION: Bond yields and the yen might fall while share prices rose, although the impact would be short-lived.

REVERT TO FULL-BLOWN QUANTITATIVE EASING POSSIBILITY: HIGHLY UNLIKELY

The central bank regards the asset buying scheme, targeting government bonds and a range of private debt, as its key monetary policy tool. But it can probably only top it up once or twice, given limits to how much more risk assets it can buy without hurting its balance sheet.

It is thus pondering alternatives. While the BOJ will not revert to old-style quantitative easing of targeting reserves parked at the central bank, it may consider buying government bonds more aggressively either by accepting debt with longer durations or significantly boosting the size of purchases.

This is not an immediate possibility but is rather an option that may emerge later this year if Japan experiences a severe economic downturn.

MARKET REACTION: The surprise move would knock down bond yields and the yen.

(Editing by Tomasz Janowski and Michael Watson)

View the original article here

Nintendo 3DS sales spike above PSP post price cut in Japan - Punch Jump

Sales for Nintendo Co.’s Nintendo 3DS spiked in the latest retail data in Japan pending a price cut for the handheld.

Media Create Co. this week said the Nintendo 3DS sold 196,077 units between Aug. 8 and Aug. 14 to rank as the No. 1 game hardware for the week.

By comparison, the hardware sold 4,132 units the week prior.

The 3DS ranked two titles in the top 10, including Pokemon Rumble Blast at No. 2 and The Legend of Zelda: Ocarina of Time 3D at No. 6.

Meanwhile, the Nintendo DSi LL sold 4,213 units to rank No. 5, the Nintendo DSi sold 3,531 to rank No. 5, and the DS Lite sold 102 units to rank No. 9 in the same period.

The PSP sold 40,409 units for the week to rank at No. 2 in Japan.

The PSP go sold 20 units to rank No. 10 for the week.

The PSP ranked four titles in the top 10, including Pokemon Hunter Diary at No. 1, Uta no Prince-Sama at No. 5, J League Pro Soccer Club 7! at No. 7, Toriko: Gourmet Survival at No. 8.

Nintendo in Aug. price cut the Nintendo 3DS handheld to $169.99, 33 percent off the current $249.99 MSRP.

The Nintendo 3DS Flame Red SKU will sell Sept. 9 at $169.99.

The company said the hardware, which began sale Mar. 24, has sold 4.32 million units worldwide and 830,000 units in the U.S.

Nintendo DS sales fell to 1.44 million in Q1, down from 3.15 million one year ago.

New titles expected to boost 3DS sales include Super Mario 3D Land in Nov. and Mario Kart in Dec.

The Nintendo 3DS includes 3-D display technology that does not require the use of special glasses.

The PS Vita, to be sold in 2012, will include the dual analog sticks, a 5-inch multi-touch OLED display, 3G & GPS, front and rear touch panels, and a compass on three axes. It will utilize flash-memory game cards.

Hardware specifications include an ARM Cortex A9 4-core CPU, front camera, rear camera, built-in microphone, and Bluetooth 2.1.

The company will partner with AT&T to allow current customers to access Wi-Fi hotspots nationwide.

The PSVita Party mode will allow users to chat with nearby owners. In addition, near will allow users to play with friends using their PSN ID.

The Wi-Fi only model will sell at $249.99. The 3G model will sell at $299.99.

Sony in May began sale of the Limited Edition PSP Entertainment Pack, which includes the PSP-3000 handheld, 2GB Memory Stick Pro, Gran Turismo, and MLB 11 The Show at $199.99.

Follow us on Twitter @PunchJump, @WeLoveHotDeals, @PreOrderBonus, and visit us at Facebook.

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U.S. logged a tiny radiation spike in March

Washington — A spike in radioactive sulfur from the damaged Fukushima No. 1 nuclear plant was detected in California in late March, but researchers say it posed no threat to health.

While the amount was higher than normal background levels, it remained small, said Mark Thiemens of the University of California, San Diego.

"The levels we recorded aren't a concern for human health. In fact, it took sensitive instruments, measuring radioactive decay for hours after lengthy collection of the particles, to precisely measure the amount of radiation," said Thiemens, lead author of a report on the findings published in Tuesday's edition of the Proceedings of the National Academy of Sciences.

Extremely low amounts of radioactive iodine later showed up in milk sampled in California, Colorado, Connecticut and Massachusetts over the following weeks.

Officials at the U.S. Environmental Protection Agency said the levels were so minuscule they were not harmful to public health. The EPA scaled back its monitoring efforts to routine levels in May.

The new report focuses on sulfur measurements.

View the original article here