The Bank of Japan threatens to start printing

Article Abstract:

It seems possible that the Bank of Japan will now consider dealing with deflation by printing money. This would cause an explosion of the country's monetary base as interest rates fall to zero. The value of the yen would plummet, and there would then be strong pressure on China and other emerging countries to become involved in competitive devaluation. This could in turn herald a serious second phase to the economic crisis in Asia. The US is keen to persuade Japan to tackle deflation through large and permanent reductions in marginal tax rates.

Deflation (Finance), Deflation (Economics)

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Can the Bank of Japan really tame the yen?

Article Abstract:

It is very important that financial authorities in Japan trying to stabilise the currency markets choose a level which is justified by economic fundamentals. A fundamental equilibrium exchange rate (FEER) which will produce balance of payments equilibrium between Japan and the US in the medium term must be found, and the real interest differential between the US and Japan must be taken into account. An adjustment must also be made for the fact that the market often needs a risk premium in addition to the difference between bond yields.

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Policy shift might yet save Japan

Article Abstract:

The Bank of Japan seems to be moving increasingly towards monetization. This would involve directly expanding the rate of growth of the money supply, with the Bank of Japan purchasing bonds from the commercial banks and crediting them with a rise in their bank balances. Bills would not be sold back into the marketplace, and this would leave money in the system, reducing the overnight rate to zero and causing the growth of the monetary supply to rise significantly.

Comment:

Has been developing a new policy for monetization

Commercial Banks, Commercial Banking, Japan, Financial management, Banking industry, Management, Bank of Japan

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