Bank Of Japan Throws Gas On Burgeoning Asia FX War

Bank Of Japan Throws Gas On Burgeoning Asia FX War

It was all about the yen on Thursday, when the Bank of Japan surprised markets with a pledge to buy unlimited amounts of JGBs at fixed-rate ops every business day if necessary. The decision conveyed an ironclad commitment to the bank's 0.25% cap on 10-year yields, which the BoJ was forced to defend earlier this month as global bonds sold off. Defense of the cap in perpetuity suggests the monetary policy divergence between Japan and the US will persist, giving the yen carte blanche to fall furt
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2 thoughts on “Bank Of Japan Throws Gas On Burgeoning Asia FX War

  1. Thank you for the article. If there’s competitive devaluation in Asia with a surging US dollar, what would be the secondary effect or indicator to look for before something snap?

  2. I have been watching Japan for lo these many years. Their solutions to economic problems are very short term and not geared to addressing their real problems. They have never fixed their banking system. It needs to be fixed with more capital- and they need to finally write off bad debts. Even more importantly, they need to fix their demographic problem. That means a family friendly policy, and a policy which fixes gender discrimination so a woman can work and raise a family with support (sound familiar). They need to fix their misallocation of land- too much land is dedicated to farming close to cities which desperately need better housing for families (suburbs!). A more liberal policy to allow more immigration would also help. (Do many of these comments look applicable to the USA? You betcha – Japan just has it worse in many respects)…..Monetary and FX policy for Japan is a bandaid which has long failed the country. They need to change badly.

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