Might add to this later.
Previously on MoreLiver’s:
MAINSTREAM
So Japan may not slide into genteel oblivion
after all. To the surprise of the Japanese people, their country is smack in
the middle of two riveting dramas that threaten to upturn the global strategic
landscape in short order. (couple of days old piece)
The Bank of
Japan announced on Tuesday its most determined effort yet to end years of
economic stagnation, saying it would switch to an open-ended commitment to
buying assets next year and double its inflation target to 2 percent.
BOJ Adopts Abe’s 2% Target in Commitment to End
Deflation – BB
The Bank of
Japan made its strongest commitment yet to end two decades of stagnation,
shifting to Federal Reserve-style open-ended asset purchases while
disappointing investors by delaying the program until next year.
Yen Rallies After BOJ Delays Open-Ended Asset
Buying Until 2014 –
BB
The yen
rallied from near its weakest level in more than 2 1/2 years after the Bank of
Japan said it will conduct open-ended asset purchases from next year,
disappointing investors who expected bolder action now.
Former Bank
of Japan Deputy Governor Toshiro Muto said that all
policy options should be available to the central bank as it looks to turn around
more than a decade of falling prices.
Japan's government should stick with
fiscal discipline targets that aim to return the budget to a primary surplus by
fiscal year 2020 to ensure trust in public finances, a leading government panel
said on Tuesday.
Japanese
Finance Minister Taro Aso said on Tuesday that the government highly
appreciated the Bank of Japan's decision to switch to an open-ended commitment
to buying assets next year and double its inflation target to 2 percent.
World
shares hit a new 20-month high on Tuesday after Japan's central bank promised to pump
unlimited stimulus into the country's economy to fight the threat of deflation
and generate growth.
BLOGS & BANKS
Overall,
Goldman believes the recent developments suggest a still positive outlook for
Japanese assets despite their recent run, but it’s clear that promises will
need to continue to translate into action - and some very difficult
longstanding issues will need to be addressed - in order to sustain the recent
positive momentum over the medium-to-longer term.
Wild swings and roundabouts courtesy of the BoJ – alphaville
/ FT
The Nikkei
rose as much as 1 per cent after the BoJ announcement, and then fell nearly as
much before recovering somewhat:
Has BoJ policy changed THAT much? – alphaville
/ FT
For all
Shinzo Abe’s talk of urgency in meeting the new 2 per cent inflation target,
the BoJ itself doesn’t actually expect it to happen that quickly. In the
forecasts accompanying today’s statement, the BoJ has maintained the 2013 CPI forecast of 0.4 per cent made back
in October — which is probably fair enough as the open-ended programme doesn’t
actually start until next year — and only moved its 2014 up to 0.9 per cent
from 0.8 per cent.
Japan 2.0 (and that’s a target, mind) – alphaville
/ FT
Remember
how Richard Koo was saying last week that inflationary expectations are
actually far more widespread in Japan these days than deflationary
expectations? And people fear inflation more than deflation?