Japan’s ban on Russian coal is unlikely to lift domestic energy prices much given that coal import prices closely track the Newcastle spot price which have fallen sharply over the past month. A bigger risk to the strong rebound in consumption we’re expecting over the coming months comes from elderly consumers remaining cautious even after receiving three jabs. Meanwhile, the Bank of Japan has settled back into its usual pattern of modest JGB purchases. We think Yield Curve Control would only become unsustainable if the Bank is forced to conduct unlimited fixed rate auctions on a weekly basis over an extended period of time.
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