Bank of Japan probes leak after newspaper reported discussion of negative rates

AFP-JIJI

The Bank of Japan is investigating how a leading newspaper got apparent word of its latest policy decision before the announcement was made.

A report Friday on the website of the Nikkei business daily posted minutes before the decision’s announcement said the BOJ Policy Board was considering setting a negative interest rate.

The report triggered a market reaction before the board had even emerged from its closed-door meeting. The yen went into a steep dive and there was a huge rally in stocks in Tokyo as investors cheered the BOJ’s newest thrust in a bid to kick-start the economy.

“We have started investigating the matter,” said BOJ spokesman Tadaaki Kumagai.

“We are interviewing BOJ officials who were in a position to know policy discussions and some government officials as they were also participating in the meeting,” he added.

The Nikkei did not immediately comment on the investigation.

The BOJ’s negative rate decision — effectively charging commercial lenders to park new deposits at the BOJ — is aimed at ramping up lending to people and businesses in order to kick-start the economy.

It was adopted by a narrow 5-4 vote, a result hinted at in the Nikkei report, which said BOJ chief Haruhiko Kuroda was trying to convince some of his skeptical colleagues.

The bank’s meetings are considered top secret, with media waiting in a closed room and no outside communication until the board releases its policy decision.

The influential paper’s report “came before we handed out printed statements to journalists, so it’s not a case of breaching an embargo,” the BOJ spokesman said.

The Nikkei, which bought the Financial Times last year, is known for its accuracy in reporting corporate earnings results weeks before official announcements. It is thought that it relies on insiders leaking figures.

Foreign investors have criticized the early reports, saying they give their Japanese counterparts an unfair advantage being many time zones ahead — and because they are usually published first in Japanese.

In December, the Financial Times caused a stir on financial markets after erroneously reporting that the European Central Bank was to leave interest rates unchanged, minutes before the ECB actually cut a key rate.

  • GBR48

    Assuming nobody was relaying events via their mobile phone, the only option left is that the room was bugged. I guess that’s only one step up from obtaining inside information on corporate earnings.

    So presumably all of this is legal in Japan then (or at least not illegal)?

  • GBR48

    Assuming nobody was relaying events via their mobile phone, the only option left is that the room was bugged. I guess that’s only one step up from obtaining inside information on corporate earnings.

    So presumably all of this is legal in Japan then (or at least not illegal)?

  • GBR48

    Assuming nobody was relaying events via their mobile phone, the only option left is that the room was bugged. I guess that’s only one step up from obtaining inside information on corporate earnings.

    So presumably all of this is legal in Japan then (or at least not illegal)?