It’s time for helicopter money in Japan – Pictet
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.
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.
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.
Janet Yellen’s Economic Club of New York speech provided a timely reminder that nobody can move markets like central bankers.
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.
Equities markets around the world climbed sharply on news of Japan’s surprise decision to cut interest rates into negative territory.
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.
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.
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.
The wide-ranging programme to revitalise the Japanese economy and raise its growth rate in the long term, as well as provide short-term stimulus, dubbed Abenomics, is on track.
Japan cannot rely solely on its depreciating currency to continue to fuel its fledgling recovery, with more emphasis needed on long-term structural reform, according to Jupiter's Japanese equities manager.
Japan's quantitative easing programme is a "disaster in the making" while its central bank has let the "lunatics take over the asylum" with a 2% inflation target, according to GLG's Stephen Harker.
Chris Iggo, CIO, Fixed Income, AXA IM takes a look at the Japanese bond market, the impact of deflation and how the European market could, and maybe should, make moves to follow the far eastern example.