Fitch Ratings affirmed Japan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A’ with a Stable Outlook. Fitch noted Japan’s “balance the strengths of an advanced and wealthy economy, with high governance standards and strong public institutions, against weak medium-term growth prospects and high public debt.” And, “strong external finances marked by a persistent current account surplus and large net external credit and international investment positions relative to peers.”
Fitch expected Japan GDP growth to slow to 1.3% in 2018 and 0.7% in 2019. However, “trade protectionism poses a downside risk to the outlook, exemplified by the imposition of a 25% tariff on US imports of steel and aluminium, including from Japan.” Also, “spillovers from trade tensions between the US and China are also a risk, as are tensions on the Korean peninsula.” Regarding inflation, Fitch projected headline inflation to reach only 1.2% at the end of 2018, and rise temporarily to 2.8% at the end of 2019 due to sales tax hike.
The monetary settings under BoJ’s yield curve control framework will “remain broadly unchanged for the foreseeable future”. Fitch noted recent slowdown in asset purchase has been sufficient to sustain the share of outstanding JGBs held by the central bank at around 40%-45%. And, “this level of BoJ ownership is within levels that would prevent the emergence of problems for JGB market liquidity, which the BoJ continues to monitor closely.”
South Korean Moon and North Korean Kim to plant the tree of “peace and prosperity” on Friday
South Korean President Moon Jae-in will meet with North Korean leader Kim Jong-un in a historical encounter tomorrow on Friday. That’s the first highest level summit between the two countries for in more than a decade.
According South Korean chief of staff, the meeting will start at 10:30 a.m. (0130 GMT) at the Peace House in Panmunjom, a village just north of the de facto border between North and South Korea. Kim will then cross the border at 9:30 a.m. (0030 GMT). Moon and Kim will then have lunch separately before holding a tree-planting ceremony in the afternoon.
In the ceremony, a pine tree will be planted on the demarcation line, as a symbol of “peace and prosperity”. Soil from Mount Paektu in North Korea and Mount Halla in South Korea will be used. Also, the tree with be watered with water brought from the Taedong River in the North and the Han River in the South.
A second round of talk will then be held after a walk in Panmunjom. A pact will then be signed by Kim and Moon, with an announcement. And the encounter will conclude with dinner on the South’s side and watch a video clip themed ‘Spring of One’.