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Reuters Breakingviews: Kuroda’s shock and awe policy

Thursday, Apr 04, 2013 - 03:35

April 4 - The new direction for the Bank of Japan represents a step towards the two-percent inflation target, says Reuters Breakingviews. But it’s by no means the final step.

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Sort of the breaking news take on this stuff shocker -- all from the bank of Japan's Kuroda -- -- had asked joins me in the studio. Not clear decisive action. It was forceful by Japanese standards. The markets like today initially or at least they reacted to that would initially which -- which is a good thing I guess. My my tape was too long -- a short yen. On the back of this a fifth of our right and Indians -- he'd been shorted quite a bit since then it's been falling. On the basis well what may prove to be exaggerated sense. To be coming if inflation. I'm you know and I think the important thing is what you said by Japanese standards and I -- he says as our piece this morning points out. -- it's still only half the aggression in terms of an increase in the size of money printing that the Fed used in the US after Lehman Brothers -- I'm indeed the goal of -- relative basis that's for Japan by the history after Pat's shot. Case indeed shock and off. Now there is to speak other problem which is of course we are they know it's gonna work. You can -- any number of -- -- Japanese government bonds and put all that money into the financial system. But will it be spent will actually put up prices. And if it doesn't. Will they get his 2% inflation target. And what else -- the Bank of Japan -- So this is a step but it by no means the last step. Next question Adam will get me to present patients are here -- if he does them. Yet -- have -- -- seems to be some some thinking out there that once Japan and it's 2% inflation all will be well. Japan as I've pointed out and peace is suffering from declining population or has declining population particularly very sharp decline in the number of young people. It's unlikely that it's gonna have very rapid growth. Or indeed much growth of any sort for years to come as population falls. I am insisting. Sorry notes if you like action -- a -- that's a big part of the story matters what we've talked about for many months now on this currency wars. Which again people of -- also in battle on the back of this and and -- peace. Picks up on this. The China Korea Taiwan Singapore. Time. Interestingly I just practice -- and who basically said look -- goes around comes around to these countries are China and Japan are pretty late in the game. This. He had been the one thing you know whether we'll help Japan or not it's hard to say if it does weaken the and that will -- Japanese exporters. But it does indeed increased attention. In in in the currency wars. And yes on Japan's relatively late like many countries have thought it could stand on principles and what the premarket to sign for awhile but now it's come around to. What is increasingly becoming conventional wisdom is that it's every man for himself for the country for itself and when it comes to trying to keep your currency level down are you impressed. I am I would say mildly impressed can believe -- elaborate I thought it would have some breaking views. I don't watch our US show comes on every day twelve birdies in seventeen that he BST. -- Mexico resources.

Reuters Breakingviews: Kuroda’s shock and awe policy

Thursday, Apr 04, 2013 - 03:35

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