Rick's October issue of the Oriental Economist includes topics of Risk Averse Culture or Adverse Risk/Reward Ratio - Nurturing Entrepreneurs, Abe’s Agenda 2017 -Election being Planned, BOJ Waves the White Flag, Rightist Nihon Kaigi Organization-Is It Really a Menace? Japan Business Pessimistic Japan-China Political Ties Sour
The keypoints of this report include, - The Bank of Japan has abandoned the pretense that it can achieve its 2% inflation target in two years, or any other particular timeframe - In the face of pressure from private banks, it refrained from going more deeply into negative rate territory regarding bank reserves at the BOJ - In another so-called “new framework” it has switched its main operating target: from an increase in the monetary base to keeping 10-year bond yields at zero - The BOJ also issued a Comprehensive Assessment of why it failed to meet its 2% target, but there is not a lot of culpa in its mea culpa; it keeps insisting that its policy will eventually work - There is no talk of what is really needed: a fiscal-monetary combination
The Bank of Japan’s (BOJ) failed negative interest rate policy (NIRP) is provoking increased opposition among the big banks and the Financial Services Agency (FSA), the ministry which protects them
Followings are the key points fro this report, - BOJ tried another surprise “bazooka” but only managed a pop gun - Will apply a “negative interest rate” of 0.1% on new deposits of “excess reserves” held by banks at the BOJ - Hope is that it will get banks to lend more and thereby boost company investment and consumer spending - It won’t work: problem is not banks unwillingness to lend, but business/firm unwillingness to borrow
We pointed out in our Nov. 16 Alert that Japan’s GDP has grown at a mere 0.6% annual pace in the nearly four years since early 2012,but our gut feeling is that the BOJ’s figure is too pessimistic, and the purpose of today’s Alert is to explore that question.
In this report, Richard argues that Japan's January exports may not be that much of a bright spot as the statistics indicated.
Richard reports that the Bank of Japan Governor has raised the grey flag for achieving the 2% inflation target in two years.
The Bank of Japan (BOJ) is pulling out all the stops in order to make good on its promise of achieving 2% inflation toward the latter half of fiscal 2015 (which ends April 2016).