Bank of Japan’s new weapon in inflation fight gets mixed reception
With news overnight that the Bank of Japan has unveiled a new form of stimulus, professional investors and economists reacted with mixed enthusiasm.
With news overnight that the Bank of Japan has unveiled a new form of stimulus, professional investors and economists reacted with mixed enthusiasm.
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Ahead of the Bank of Japan’s policy meeting on Wednesday, BNY Mellon’s Miyuki Kashima argued Abenomics has not run out of steam and despite the negative headlines, there are encouraging signs of economic recovery.
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The mere suggestion of a revision of the Bank of Japan’s monetary policy has already had an impact on government bond markets but the uncertainty surrounding the exact shape of governor Haruhiko Kuroda’s plan has left investors divided on whether genuine returns in the sector are possible.
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Japan reported annualised GDP growth in the period from April to June of just 0.2%, undershooting modest forecasts of 0.7%.
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Unleashing ‘helicopter money’ is a way for the Bank of Japan to repair the damage to its credibility caused by persistently missing its inflation target, according to Pictet Asset Management.
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Bank of Japan’s meeting on Friday will create another Japanese equites entry point for those that missed the boat in mid-June, argued Katsunori Kitakura, lead strategist at SuMi Trust.
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Janet Yellen’s Economic Club of New York speech provided a timely reminder that nobody can move markets like central bankers.
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What was viewed as a sign of desperation by many when the Bank of Japan cut rates well into negative territory at the end of January has been followed by a poor economic growth number.
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Equities markets around the world climbed sharply on news of Japan’s surprise decision to cut interest rates into negative territory.
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Japan falling into a technical recession despite the monetary stimulus measures that have been taken does not mean there are no bright spots in the country, including a booming construction sector.
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A year after the decision to increase its quantitative easing programme the Bank of Japan (BoJ) voted on Friday, by a majority of eight to one, to leave its policy unchanged at ¥80trn a year.
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The Nikkei 225 ended the first half of 2015 at an 18-year high, and after 20 years of deflation there are hopes that the Japanese market is finally taking off.
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