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  1. #1
    Legendry Member milos's Avatar

    BOJ Statement on Monetary Policy !!!

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    Japan's economy has been recovered.The Bank of Japan will continue money market operations which is included purchase of government bonds.Exporters have stopped decreasing overseas economies.Public investment has to increase.continuation of upside trend to 104 seems much more probable.The companies want the yen to stabilize around 100 to the dollar.Some companies want the yen to weaken to 105 to the dollar.All yen pairs will go up because the monetary easing will be the same.It will go further weaken the yen.If there is a break to the upside it would go in for 104 although target is pointed a little higher.

  2. #2
    Legendry Member Michael Hodges's Avatar
    I wouldn't say that Japan's economy has been recovered but it does look like efforts by Abe and Kuroda are steering the country down the path to recovery. This week the Japanese government annnounced a new budget with increased spending on public works and infrastructure aimed at spurring the economy as well. The long term trend in the yen is down versus most other currencies at this time. I still can't help but think a pullback, correction or just plain old test of support is due but I have also said myself that this trade is not going to behave like normal because it is being manipulated by the BOJ and the government of Japan. My long term target is around 120 but that could take a few years to reach. Nearer term 105 looks good, maybe 110 a little further out (versus the dollar).

  3. #3
    Specialist Member LesterK's Avatar
    The 120 level will be reached much sooner than you expected Michael It could be in a matter of few months. The monetary policy in Japan is so aggressively strong that nothing will stop the current devaluation process.

  4. #4
    Legendry Member milos's Avatar
    Quote Originally Posted by LesterK View Post
    The 120 level will be reached much sooner than you expected Michael It could be in a matter of few months. The monetary policy in Japan is so aggressively strong that nothing will stop the current devaluation process.
    Yen will continue to devaluation process as you said Lester.

  5. #5
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by LesterK View Post
    The 120 level will be reached much sooner than you expected Michael It could be in a matter of few months. The monetary policy in Japan is so aggressively strong that nothing will stop the current devaluation process.
    i think you may be right, I didn't want to be too strong of opinion....it bites me in the ass sometimes (being opinionated)

  6. #6
    Legendry Member milos's Avatar
    Japan's deputy finance minister Yamaguchi said that he was prepared to take various steps and he would monitor the market moves.In the meantime,Japan's Nikkei fell 7.3%. Japanese bond purchasing program will last a 2 years.This program is done during the first week of the month.We will see retracement.Yen has strengthened 2% against the U.S. dollar.

  7. #7
    Legendry Member milos's Avatar
    Kuroda was spoken on subject:"Financial Crisis and the Global Financial System." Global financial crisis is faced in process of turbulence market,capital mobility and independent monetary policy.Currency crisis and floating exchange rate system caused capital mobility.The last financial crisis has a great impact on the global financial system. Kuroda was speaking on the spillover of the crisis from the United States of America to Europe,Asia and South America.He also mentioned the concept of "Financial trillema" of financial integration capital mobility,financial stability and national financial policy.In the end Kuroda concluded that it would be needed to establish a new global financial system.

  8. #8
    Specialist Member marvel's Avatar
    Quote Originally Posted by milos View Post
    Kuroda was spoken on subject:"Financial Crisis and the Global Financial System." Global financial crisis is faced in process of turbulence market,capital mobility and independent monetary policy.Currency crisis and floating exchange rate system caused capital mobility.The last financial crisis has a great impact on the global financial system. Kuroda was speaking on the spillover of the crisis from the United States of America to Europe,Asia and South America.He also mentioned the concept of "Financial trillema" of financial integration capital mobility,financial stability and national financial policy.In the end Kuroda concluded that it would be needed to establish a new global financial system.
    The Japanese policy makers like Kuroda are facing very difficult situation where they have to react very quickly and to prevent the economy from two very big enemies – deflation from the one side, if they stop their monetary easing policy or inflation if they continue too long with this way of increasing the monetary supply. So it will be bad in both situation if they don’t react accordingly and I think they won’t be able to react alone and will need help from the international financial community.

  9. #9
    Legendry Member milos's Avatar
    Quote Originally Posted by marvel View Post
    The Japanese policy makers like Kuroda are facing very difficult situation where they have to react very quickly and to prevent the economy from two very big enemies – deflation from the one side, if they stop their monetary easing policy or inflation if they continue too long with this way of increasing the monetary supply. So it will be bad in both situation if they don’t react accordingly and I think they won’t be able to react alone and will need help from the international financial community.
    You are right.Japan will face with big challenge.We will see the next moves.

  10. #10
    Legendry Member milos's Avatar
    The Bank of Japan directs radical monetary policy incentives to end the nearly two decade long deflation.It is needed more flexibility in the conduct of monetary policy.Growth of borrowing costs that would have the effect of lose policies implemented by the central bank stimulus plan to lift the mood,growth and the creation of future expected inflation.Injected money into the economy to make up for less than two years fulfilled the promised of achieving the 2% inflation in about two years.There is concern that the target inflation of 2% within two years was too ambitious for an economy that was destroyed to decade by deflation.

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