The desperate moves of Japan are going on. http://online.wsj.com/article/SB10001424127887323844804578530541651768054.html
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Why did Japan say they want 2% inflation when they are panicking with 10y bonds @ 1%?
- Thread starter Newmoney24
- Start date
Japanâs Economic Stimulus Gets Its Second Wind
Earlier, the governmentâs revision of gross domestic product data showed Japanâs economy expanded at a rate of 1.0 percent between January and March, above a preliminary estimate of 0.9 percent, after estimates for corporate capital spending and stronger household spending were raised. That new clip came to 4.1 percent in annualized terms, up from 3.5 percent.
Bank lending, which had stubbornly refused to grow despite years of easy money amid companiesâ weariness over growth prospects, rose a robust 1.8 percent in May from the same month last year. That uptick came as a victory for the Bank of Japan, which has embarked on a bold program to pump the economy with cheap money to get businesses to borrow and invest.
Data released Monday also showed Japanâs current account surplus doubled to Â¥750 billion, or nearly $7.6 billion, far above market forecasts of slightly above Â¥300 billion, as a weakened yen pushed up returns on overseas investments. Last year, Japanâs current-account surplus shrunk to record levels as a strong yen hurt exporters, and an energy shortfall led to a jump in the costs of importing fuel. But a welcome drop in the yen â another consequence of the central bankâs loose monetary policies â has eased some of the pressure on the balance of trade.
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Full steam ahead. Godzilla is buying!
Earlier, the governmentâs revision of gross domestic product data showed Japanâs economy expanded at a rate of 1.0 percent between January and March, above a preliminary estimate of 0.9 percent, after estimates for corporate capital spending and stronger household spending were raised. That new clip came to 4.1 percent in annualized terms, up from 3.5 percent.
Bank lending, which had stubbornly refused to grow despite years of easy money amid companiesâ weariness over growth prospects, rose a robust 1.8 percent in May from the same month last year. That uptick came as a victory for the Bank of Japan, which has embarked on a bold program to pump the economy with cheap money to get businesses to borrow and invest.
Data released Monday also showed Japanâs current account surplus doubled to Â¥750 billion, or nearly $7.6 billion, far above market forecasts of slightly above Â¥300 billion, as a weakened yen pushed up returns on overseas investments. Last year, Japanâs current-account surplus shrunk to record levels as a strong yen hurt exporters, and an energy shortfall led to a jump in the costs of importing fuel. But a welcome drop in the yen â another consequence of the central bankâs loose monetary policies â has eased some of the pressure on the balance of trade.
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Full steam ahead. Godzilla is buying!
The BOJ totally shit the bed yesterday. I guess investors/traders/gamblers/hardcore Keynesians will have to wait til after the July elections to see what he does next.
Quote from Covertibility:
The BOJ totally shit the bed yesterday. I guess investors/traders/gamblers/hardcore Keynesians will have to wait til after the July elections to see what he does next.
Japan is the perfect test run for the US. Their demographics are worse, their debt is significantly more, etc.
If Abenomics works for them, and 5 years from now they haven't imploded, it basically means the social program gravy train in the US can continue for quite some time to come.
Quote from clacy:
Japan is the perfect test run for the US. Their demographics are worse, their debt is significantly more, etc.
If Abenomics works for them, and 5 years from now they haven't imploded, it basically means the social program gravy train in the US can continue for quite some time to come.
Japan is a laboratory for sure, but its economic-demographic structure seems to me closer to Europe and Italy particularly.
The problem of the Japanese monetary policy is that the long term commercial balances have been altered with other Asian countries. This graph represents the Asian Index versus the yen ... the weakness of the Japanese currency is definitely excessive towards the Asian ones.
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Quote from elisab:
What do you think of the Chinese rates increase during these days? Are financial problems coming..? Here's the Shibor to 1 week, more than 8%!
From the link below:
"...What does the spike in rates mean? Large banks are increasingly leery of tapping into their pools of cash to lend to each other. Recent reports that China Everbright Bank failed to repay a short-term loan to Industrial Bank Co. arenât helping. Industrial Bank says that report is âuntrue and exaggerated.â But short-term lending markets suggest other bankers are skeptical."
http://qz.com/95292/heres-whats-behind-the-chinese-cash-crunch/
Also an interesting read, from John Mauldin:
http://www.mauldineconomics.com/images/uploads/pdf/2013_06_18_OTB.pdf