Bank of Japan
Pundits Digesting Nuances of Signals from the Fed, Bank of Japan and ECB
August 31, 2010
Among the most telling comments in the August FOMC minutes is the sentence, “Members generally saw both employment and inflation as likely to fall short of levels consistent with the dual mandate for longer than had been anticipated.” Often with a mandate to maintain price stability but also maximize jobs, there is a conflict with [...] More
Bank of Japan Does Nothing New
August 10, 2010
Although talking things over for more than six hours and devoting considerable discussion to the risks of a rising yen, Japan’s central bank Policy Board in the end were more than happy not to upstage the FOMC, which releases a statement on U.S. monetary policy later today. Bank of Japan officials Left the overnight money [...] More
Bank of Japan Preview
August 9, 2010
Japan’s central bank authorities face mounting pressure to take more concrete action to counter deflation from politicians in the ruling party and the opposition parties alike. There have been calls for legislation that would weaken the Bank of Japan’s independence. The GDP deflator in the first quarter of 2010 was 2.8% lower than in 1Q09 [...] More
Raising Very Low Central Bank Rates Easier Said Than Done
July 15, 2010
Having followed Bank of Japan policymaking since before Japan’s financial crisis, I was suspicious when consensus forecasts surfaced several months ago that the Fed funds rate would rise later this year. I’m even doubtful about 2011. A U.S. recovery had begun after mid-2009, and GDP growth accelerated to a 5.6% annualized pace in 4Q09 and [...] More
No Surprises from the Bank of Japan
July 15, 2010
By a unanimous 9-0 vote, the fully-staffed BOJ Policy Board kept its overnight uncollateralized interest rate at 0.1% and promised to maintain an “extremely accommodative financial environment” to combat “the critical challenge of overcoming deflation.” The rate has not been modified since a cut of 20 basis points in December 2008, nor has it exceeded [...] More
Bank of Japan Preview
July 14, 2010
No changes are anticipated from the monthly meeting of the BOJ’s Policy Board on Wednesday and Thursday. Because rates were already very low, officials implemented only 40 basis points of cuts to 0.1% in the autumn of 2008. Outright purchases of JGBs have been kept at 1.8 trillion yen per month since March 2009, and [...] More
Bank of Japan Business Survey Results Better Than Expected
June 30, 2010
The so-called Tankan survey, a quarterly snapshot of business confidence, conditions and expectations, has improved sharply and persistently since hitting bottom in the first quarter of 2009. Gains this past quarter not only surpassed what firms were expecting to occur when last polled three months ago but also exceeded recent projections by street analysts. This [...] More
Bank of Japan Unveils New Program to Encourage Corporate Lending in the Private Sector
June 15, 2010
The Bank of Japan after a two-day, six-hour and 11-minute meeting Voted 8-0 to keep the uncollateralized overnight call rate at 0.1% where such has been since December 2008. In contrast to multi-hundred basis point rate declines by most central banks during the world recession, this rate is just 40 basis points below its prior [...] More
Bank of Japan: More Show Than Substance
May 21, 2010
The Policy Board’s late May meeting, slightly more than six hours of discussions over two days, took the following actions: Left its rate for uncollateralized overnight loans at 0.1%. The vote was 8-0. Unveiled a framework for 1-year lending to banks against pooled collateral at the overnight rate level. In turn, banks are obligated to [...] More
Bank of Japan Leaves Policy Rate Unchanged
May 10, 2010
By a unanimous decision in the Bank of Japan’s first policy meeting since its quarterly in-depth economic review, the overnight money rate target was left at 0.1%. It has been at that level since a reduction of 20 basis points in December 2008. There had been one early cut of the same amount in October [...] More
