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Overly intervene during normal time? HKMA did it before successful, by directly bought Hang Seng during 1998 crisis. Will the same work for Japan?
Bank of Japan turns activist investor to revive economy
04 Jan 2016 07:13
[TOKYO] Japan's central bank, which dominates the domestic bond market, has begun to call the shots in the equity market as well - to the point where asset managers are looking to design investment funds with the Bank of Japan in mind.
The bank has blazed a trail in global central banking by becoming something of an activist investor in pursuit of economic revival, using its influence as a mainly indirect owner of shares to support firms that spend more cash at home.
The bank, which owns about US$54 billion in exchange-traded funds (ETFs), is ramping up its purchases but has yet to give any detailed investment criteria, beyond a preference for firms with growing capital expenditure and investment in its staff.
...
REUTERS
Source: Business Times Breaking News
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Problem with Japan is their debt. Once it hit a critical point, it is very very difficult to get out as interest payments suck up any available funds, even if the central bank interest rate is low.
The only way to get on top of things is to cut back on spending and pay back interest and principal. The other way is to try and "grow" the economy and "inflate" away the debt to lower levels, like what the americans are trying to do. But you need a rapidly expanding population and also increasing productivity for that to work. Japan has too much welfare spending and ageing population.
Short term the QE method just inject liquidity and inflates asset classes like property/stocks, doesn't do anything for productivity or a country's infrastructure..
Very likely Japan will have another lost decade. Just like Greece case, if government and people just want to keep on spending and borrowing and paying interest without any fiscal discipline they will never dig themselves out of the hole.
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(04-01-2016, 12:56 PM)BlueKelah Wrote: Problem with Japan is their debt. Once it hit a critical point, it is very very difficult to get out as interest payments suck up any available funds, even if the central bank interest rate is low.
The only way to get on top of things is to cut back on spending and pay back interest and principal. The other way is to try and "grow" the economy and "inflate" away the debt to lower levels, like what the americans are trying to do. But you need a rapidly expanding population and also increasing productivity for that to work. Japan has too much welfare spending and ageing population.
Short term the QE method just inject liquidity and inflates asset classes like property/stocks, doesn't do anything for productivity or a country's infrastructure..
Very likely Japan will have another lost decade. Just like Greece case, if government and people just want to keep on spending and borrowing and paying interest without any fiscal discipline they will never dig themselves out of the hole.
Market consensus of Japan current problem, is both consumers and companies are unwilling to spend, less likely due to debt burden, but more likely due to pessimism on future outlook.
The observation, is inflation still below target, even after huge injection of money supply (liquidity). More company capex, and wage increment were the targets, but none improved significantly after last round of effort.
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Japan QQE,, remains ineffective...
Fewer Japan households see prices rise ahead: BOJ survey
08 Jan 2016 12:46
[TOKYO] Fewer Japanese households expect prices to rise in coming years compared with three months ago, a Bank of Japan survey showed, suggesting growing scepticism about the bank's stand that its massive money printing will help accelerate inflation to its 2 per cent target.
Households were also less optimistic about the economy than three months ago, the survey showed on Friday, underscoring the fragile nature of Japan's recovery.
The ratio of households that expect prices to rise a year from now stood at 77.6 per cent in December, down from 81.9 per cent in September, according to the survey.
The survey also showed the ratio of households projecting prices to rise five years ahead fell to 80.1 per cent from 83.7 per cent, a sign that slumping energy and commodity prices were hurting inflation expectations.
...
REUTERS
Source: Business Times Breaking News
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Too big to fail? Japan policy makers are learning closely with US counterparts...
Japan state fund offers 200b yen to help save Sharp: report
11 Jan 2016 10:54
[TOKYO] Japanese government-backed fund has offered to invest 200 billion yen (US$1.71 billion) to help bail out electronics maker Sharp Corp, the Nikkei business daily reported on Monday.
The Nikkei report said Sharp would also seek 150 billion yen in existing loans from lenders to be converted to preferred shares in a debt-for-equity swap.
...
Source: Business Times Breaking News
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The struggle of BOJ with Japan corporations. All profits have been saved for raining day, with minimum investments.
BOJ offers gloomy view on wages, market rout clouds outlook
18 Jan 2016 18:25
[TOKYO] The Bank of Japan (BOJ) expressed disappointment at how slowly companies are raising pay despite a tightening job market, suggesting its readiness to expand stimulus if the recent market turmoil further delays wage hikes.
But BOJ governor Haruhiko Kuroda maintained his upbeat view on the economy and offered no clear signs that additional stimulus may be forthcoming this month.
"Japan's economy is expected to continue recovering moderately," he told a meeting of the BOJ's regional branch managers on Monday, making no mention of the global market turmoil that has sent Tokyo stocks tumbling.
...
REUTERS
Source: Business Times Breaking News
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A resignation of the economy minister, is a serious setback of Japan Abenomics...
Japan's economy minister Amari to explain bribery accusations on Thursday
26 Jan 2016 13:22
[TOKYO] Japan's Economy Minister Akira Amari is expected to hold a news conference on Thursday to offer an explanation over accusations he had taken bribes, a top government spokesman said, suggesting a decision on whether he will stay on at the post is imminent.
Mr Amari, a core member of premier Shinzo Abe's economic policy team, is under fire over a media report that he and his aides had accepted money from a construction company in exchange for helping the firm receive compensation for disputes over land ownership and waste removal at a public works site.
Mr Amari said last week he has done nothing illegal and that he was told by Abe to fulfil his duty as minister. But it is uncertain whether he will stay on, as opposition parties step up calls for him to resign, some analysts say.
...
REUTERS
Source: Business Times Breaking News
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(26-01-2016, 03:53 PM)CityFarmer Wrote: A resignation of the economy minister, is a serious setback of Japan Abenomics...
Japan's economy minister Amari to explain bribery accusations on Thursday
26 Jan 2016 13:22
[TOKYO] Japan's Economy Minister Akira Amari is expected to hold a news conference on Thursday to offer an explanation over accusations he had taken bribes, a top government spokesman said, suggesting a decision on whether he will stay on at the post is imminent.
Mr Amari, a core member of premier Shinzo Abe's economic policy team, is under fire over a media report that he and his aides had accepted money from a construction company in exchange for helping the firm receive compensation for disputes over land ownership and waste removal at a public works site.
Mr Amari said last week he has done nothing illegal and that he was told by Abe to fulfil his duty as minister. But it is uncertain whether he will stay on, as opposition parties step up calls for him to resign, some analysts say.
...
REUTERS
Source: Business Times Breaking News
More challenges ahead for Abenomics, with the newly on-board econ minister...
Japan Abe: wants new econ minister to continue structural reforms
28 Jan 2016 18:36
[TOKYO] Japanese Prime Minister Shinzo Abe said on Thursday he wants the new economy minister, Nobuteru Ishihara, to continue the government's efforts to push through structural reforms.
"Abenomics is at a critical juncture. I'd like him to use his full capacity to pull Japan out of deflation and put its economy on a growth path," Abe told reporters.
Abe said he asked Ishihara, a former ruling party executive, to succeed outgoing economy minister Akira Amari, who announced his resignation to take responsibility for a political funding scandal.
REUTERS
Source: Business Times Breaking News
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Much aggressive than market expected. Will it work?
Bank of Japan adopts negative rates, keeps asset-buying target
TOKYO (Jan 29): The Bank of Japan adopted a negative interest rate policy on Friday while maintaining its record asset purchase plan.
Governor Haruhiko Kuroda’s board voted 5-4 to put an interest rate of –0.1% on current accounts held at the central bank.
Kuroda’s task in achieving his goal of sustainable inflation remains difficult amid subdued wage growth and a renewed decline in oil prices, leading a growing number of economists to predict additional stimulus later this year. His resolve to do “whatever it takes” to meet the price target -- a phrase he has repeated in speeches in recent months -- will be tested if inflation and growth prospects worsen further.
...
http://www.theedgemarkets.com/sg/article...ing-target
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Abenomics serves as a very good case study, on the level of difficulty to bring back an long-term deflation, even by economic super-power. Let's see the impact of negative rate, months later...
Japan's savers won't play ball as BOJ turns negative
03 Feb 2016 07:17
[TOKYO] The Bank of Japan (BOJ) hopes that cutting interest rates below zero will boost spending and investment, but fear, inertia and years of paltry returns mean the nation's army of savers is unlikely to march to the central bank's tune.
After the BOJ made its move on Friday to charge banks for holding their reserves from Feb 16, some retail banks are already cutting their deposit rates, and the rest are expected to follow suit.
...
REUTERS
Source: Business Times Breaking News
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