The Bank of Japan (BOJ) can double its annual pace of bond accumulation to ￥100 trillion (US$985 billion) to give fresh impetus to the economy after next month’s sales-tax increase, an aide to Japanese Prime Minister Shinzo Abe said.
“It’s not taboo for the BOJ to double the goal of bond holdings,” Koichi Hamada, 78, a retired Yale University professor who advises Abe on monetary policy, said in an interview on Friday in Tokyo. “The BOJ will be concerned about the real risk of being seen as financing debt, but drastic action is justified to pull Japan’s economy out of 15 years of stagnation.”
Hamada said the central bank should add stimulus as soon as May should indicators show the 3 percentage-point tax rise is seriously damaging the economy. He said annualized growth of 0.7 percent in the final quarter of last year showed that “Abenomics isn’t strong enough.”
“It would be too late if the BOJ waits for April-June GDP data” due in August, Hamada said. “I don’t doubt the BOJ’s projection that Japan’s economy will continue a moderate recovery even after the sales-tax increase because [Bank of Japan governor Haruhiko] Kuroda’s stance shows he can quickly and flexibly add powerful stimulus.”
Economists at BNP Paribas SA and HSBC Holdings PLC were among 10 of 34 analysts in a Bloomberg News survey who said the bank would need to accumulate at least ￥90 trillion of Japanese government bonds a year — equal to all new issuance and up from about ￥50 trillion now — to have the same impact as the April easing.
Kuroda said there is “no limit” to what the bank could do if it needed to adjust its policy, Jiji news agency reported, citing comments he made on Thursday in an interview. The central bank does not have to “outwit” the market, he said, according to Jiji.
The yen weakened 18 percent against the US dollar last year, and the benchmark TOPIX stocks index rose 51 percent after the central bank began unprecedented stimulus on April 4 last year. The yen has strengthened about 4 percent this year, trading at ￥101.71 to the dollar at 5:41pm in Tokyo, and the TOPIX has fallen more than 10 percent.
SMBC Nikko Securities Inc chief rates strategist Chotaro Morita agrees with Hamada that the central bank would have to double its pace of boosting holdings to get the same punch, a move Morita said could help push the yen down to ￥120 per US dollar.
“That simple message would help make overseas investors understand the BOJ’s resolve to achieve its price goal,” Morita said. “Weakening the yen is basically the only way that the BOJ can maintain a chance to achieve its 2 percent inflation target.”
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
The demise of the coal industry left the US’ Appalachian region in tatters, with lost jobs, spoiled water and countless kilometers of abandoned underground mines. Now entrepreneurs are eyeing the rural region with ambitious visions to rebuild its economy by converting old mines into solar power systems and data centers that could help fuel the increasing power demands of the artificial intelligence (AI) boom. One such project is underway by a non-profit team calling itself Energy DELTA (Discovery, Education, Learning and Technology Accelerator) Lab, which is looking to develop energy sources on about 26,305 hectares of old coal land in
Netflix on Friday faced fierce criticism over its blockbuster deal to acquire Warner Bros Discovery. The streaming giant is already viewed as a pariah in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of traditional industry practices. As Netflix emerged as the likely winning bidder for Warner Bros — the studio behind Casablanca, the Harry Potter movies and Friends — Hollywood’s elite launched an aggressive campaign against the acquisition. Titanic director James Cameron called the buyout a “disaster,” while a group of prominent producers are lobbying US Congress to oppose the deal,
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
RSS