From Mish's Global Economic Trend Analysis:
Economists debate limits of monetary easing, especially negative
interest rates that prompt savers and even banks in Germany to stockpile
cash in safes and bank vault. Bank of Japan chief Haruhiko Kuroda sees
things differently.
Please consider Bank of Japan Vows to Keep Easing Monetary Policy.
Haruhiko Kuroda has vowed to keep easing monetary policy
until inflation reaches 2 per cent, in a defiant speech dismissing the
Bank of Japan’s critics.
Mr Kuroda, governor of the BoJ since 2013, claimed the central bank’s
policies “have contributed significantly to the positive turnround in
Japan’s economy” and said there was no chance of reducing the level of
monetary accommodation.
His remarks pave the way for further easing in September, including
the possibility of cutting interest rates from the current minus 0.1 per
cent. They will eliminate market speculation that the BoJ could back
away from aggressive policy.
“It is often argued that there is a limit to monetary easing but I do
not share such a view,” Mr Kuroda told an audience in Tokyo. He said
there was ample room for the BoJ to buy more government bonds, to cut
interest rates further, or to buy other assets such as corporate bonds,
equity and real estate funds.
Moreover, “other new ideas should not be off the table”, he added.
Analysts have suggested various new avenues for easing, such as a cap on
the yield curve; BoJ purchases of foreign bonds; or buying other
domestic assets such as local government debt....
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