The Bank of Japan (BoJ) is to buy a further 10 trillion yen (£79bn) of bonds,
bringing the total accumulated so far in its battle against deflation to 80
trillion yen, or 20pc of Japanese GDP.
Jun Azumi, Japan’s finance minister, praised the bank’s “bold” efforts to hold
down the yen, lending credence to suspicions that the real motive is to
counter “beggar-thy-neighbour” currency devaluations by other powers and
prevent the strong yen choking Japan’s export industry.
Yunosuke Ikeda, from Nomura, said the Bank of Japan had yielded to “immense
political pressure” after months of criticism. Governor Masaaki Shirakawa is
a champion of orthodoxy, a soulmate of Germany’s Jens Weidmann.
Mr Shirakawa stated on Wednesday – almost with regret – that Japan
now has the “easiest monetary conditions” in the rich world. “I do not think
that you could argue that the BoJ is less bold than the Fed,” he said.
David Rea, from Capital Economics, said attempts to weaken the yen are doomed
to failure as Japan’s safe-haven role makes it a magnet for funds fleeing
the unresolved crises in the rest of the world. He expects the yen to
strengthen from 78 yen to the dollar to 70 yen by late next year. It was at
125 yen five years ago. China’s yuan is pegged to the dollar so Japan has
suffered a dramatic loss
of competitiveness against China.
Read more: http://www.telegraph.co.uk/finance/economics/9554131/Japan-launches-QE8-as-20-year-slump-drags-on.html
Read more: http://www.telegraph.co.uk/finance/economics/9554131/Japan-launches-QE8-as-20-year-slump-drags-on.html
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