Kuroda still uses the “bazooka”: the Bank of Japan introduces negative rates – Il Sole 24 Ore

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This entry was posted on January 29, 2016 at 07:00 am.
The last change is the January 29, 2016 at 08:26.

The Tokyo Stock Exchange and is ‘addressed today in sharp rise and the yen and’ lot weakened after the decision of the Bank of Japan to loosen monetary policy further to support the economy by introducing surprise of negative interest rates after strong fluctuations, the Nikkei index closed up 2.8% despite the ‘arrival of some disappointing economic data.

The real surprise – a new “bazooka” the governor Haruhiko Kuroda – and’ the entry of the BoJ on a trail on which he had made from tread the European Central Bank, with the introduction of negative interest rates (-0.1%, from the previous + 0.1%)) for excess deposits of financial institutions at the central bank. A move accompanied by the statement that, if necessary, the rates become even more ‘negative. The initiative belies and contradicts previous directions and ‘was taken with a narrow majority of 5 to 4 among the board members. Sara ‘launched a subsystem in three bands (positive rates, zero rates and negative rates) for the assets of financial institutions parked. It not ‘was actually increased the purchase of bonds and other assets (as some investors would have preferred). Reduced inflation estimates for the fiscal year beginning in April in a; 0.8% from the previous 1.4%, reaching the increasingly ‘elusive target of 2% inflation and’ was postponed – with the subject of the continuing decline in oil prices – up to six months around the first half ‘of fiscal 2017 (March to October).

A number of investors actually were expecting expansive moves by the BoJ is related to a deterioration in the inflation expectations and because ‘the European Central Bank has signaled a can-orientation towards a further easing of its monetary policy (in contrast to the Federal Reserve, which does not exclude a future continuation of the operation of a rise in US interest rates). But until this morning most analysts assumed a referral to the spring of concrete initiatives in Tokyo.
Meanwhile, the latest figures show that inflation in Japan is close to zero: in December consumer prices “core (including as energy but excluding fresh food) rose only 0.1% from a year earlier, in line with the previous month.
Household spending in December and ‘down to the rhythm most’ fast almost a year, with a decline of 4.4%. Industrial output and ‘also fell in December by 1.4% from the previous month, the most’ expectations. And now ‘it was reported a contrazioen exports in December. By contrast, the signals continue stiffening of the labor market. The unemployment rate in December and ‘remained at 3.3%, having improved by 0.2 percentage points in November.

The availability ‘job is square at the highest for 24 years, with 1.27 positions available per request. After the resignation announced yesterday the minister of economic and fiscal policies Akira Amari (slipped on a scandal involving alleged bribes), the government has lost one of the main architects dell’Abenomics, the effectiveness of which are being strengthened doubts in light of erratic performance economy (which has avoided a breath a new recession in the fall). Amari, among other things, was considered an advocate of “growth”, in counterpoint with Taro Aso, who as finance minister must “curb” stressing the need for fiscal consolidation.

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