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CHINA-JAPAN: Japan Cab Sec Calls ICBM Test 'A Matter Of Serious Concern'
(MNI) London - The rare launch of an intercontinental ballistic missile (ICBM) in the Pacific by China's People's Liberation Army (PLA) has raised tensions in the Far East, with Japan's Chief Cabinet Secretary Yoshimasa Hayashi saying that the launch 'is a matter of serious concern for Japan and the international community.' It marks the first time since 1980 that the PLA has launched an ICBM into international waters, rather than at a remote inland site.
- A statement from the Chinese Ministry of National Defence claimed that the missile with a dummy warhead was fired "into the relevant high seas of the Pacific Ocean, which accurately landed in the designated sea area," adding that "This missile launch is a routine arrangement of annual military training, in line with international law and international practice, and is not directed at any specific country or target." State-run Xinhua reports that "China notified the relevant countries in advance."
- Reuters reports: "The PLA Rocket Force, which oversees the country's conventional and nuclear missiles, has been tasked with modernising China's nuclear forces in the face of developments such as improved U.S. missile defences, better surveillance capabilities, and strengthened alliances."
- Reuters: "Some analysts say the speed of China's nuclear build-up goes beyond credible minimum deterrence - the smallest strategic arsenal needed to prevent attacks. Beijing has for years stuck to a "no first use" nuclear weapons policy, but analysts note the PLA is catching up with major nuclear powers by fielding a nascent triad of weapons that can fired from land, sea and air."
BOE: Greene: "Cautious, steady-as-she goes approach" appropriate
Greene: "I believe it is appropriate to take a gradual approach to removing restrictiveness. This has motivated my most recent vote to hold Bank Rate at 5% in September, after we cut it by 25 basis points in August. Over time, I will be looking for incoming data to provide evidence that the risk of the third case is diminishing and the probability of the second is growing. Until then, I believe a cautious, steady-as-she goes approach to monetary policy easing is appropriate."
BOE: Greene due to speak at 9:00BST
- After hearing from Mann last week, we will hear from the MPC’s other external hawk at 9:00BST (recall Haskel has left the committee): Megan Greene is due to speak on consumption at the Newcastle Chamber of Commerce. Text will be released here.
- Although neither Greene nor Mann’s votes are likely needed for a November cut, if there is agreement from the hawks that cuts are appropriate, it shows a wider softening of the MPC’s tone.
- Indeed, given Mann’s comments last week and her previous rhetoric, it might be that she is more likely to favour sequential cuts at some point in this cycle ahead of other members who are currently considered to be more dovish.
- Greene is due to speak again next week, while next week will see Chief Economist Pill (who also hawkishly dissented) in August, speak at a CBI event.
