Article:
TOKYO (Reuters) - The Bank of Japan is ready to take further steps to support the economy in the face of the coronavirus epidemic, Governor Haruhiko Kuroda said after a meeting with Prime Minister Shinzo Abe on Thursday.
The government is working on a new spending package that may include cash payouts to households and subsidies to tourism companies hit by a slump in overseas visitors, according to government officials with direct knowledge of the matter.
The size of the package, to be compiled in April, may range from 10 trillion to 20 trillion yen ($96 billion to $193 billion), funded by government bonds, they said.
"There may be little choice but to issue deficit-covering bonds," to finance the package, one official said on condition of anonymity because of the sensitivity of the matter.
Comments and Ideas:
The Bank of Japan and the Japanese government need to do whatever they can, and more to minimize the situation. In normal market activities there is not always the need or desire to solve every market economy challenge. But these are unprecedented challenges are are beyond the scope of normal market challenges.
All measures need to be looked at. Maybe even some new and innovative measures need to be considered and or measure that have never been thought of before and or maybe were considered to risky and or too unconventional for normal market activities.
Article:
The meeting between Kuroda and Abe - held every few months to exchange views on the economy and markets - came before the BOJ meets next week, when the central bank is expected to ramp up monetary stimulus. They last met in September.
The BOJ would join the Federal Reserve, the Bank of England and, most likely, the European Central Bank. The Fed and the BoE both have cut their benchmark interest rates half a percentage point, and the ECB is all but certain to roll out new stimulus measures when it meets later on Thursday.
Policymakers are working to bolster growth as the coronavirus epidemic attacks their economies, already weakened by trade tensions and slowing global demand.
Kuroda said the BOJ has been providing ample liquidity and stepping up asset purchases in response to recent market moves, which he said were "fluctuating wildly."
Comments and Ideas:
All economies are very much inter-connected. As such all central banks need to think of their own economy and think of how their economy is connected to other economies too. Central banks need to work on coordination to minimize this situation, if knowingly unable to stop or solve the problem, at least continue to minimize the situation as much as possible.
Boosting growth at this stage might be a stretch. Maybe the strategy should be to minimize losses related to less economic growth. Its most likely a given that economics losses are going to increase. As such central banks need to find measures to minimize the losses and not think about growth.
Amble liquidity is the key to minimizing losses. And even more and even more as needed over the next six months to a year. Its not the time to think or worry about debt. Its the time to save the economy now and for the future.
Article:
"We'll take appropriate steps as necessary in a timely manner, while closely monitoring developments," Kuroda told reporters.
The BOJ has been under pressure to loosen policy at its March 18-19 rate review as slumping stock markets, a spike in the yen and the fallout from the coronavirus epidemic threaten to push the economy into recession.
A survey released on Thursday showed large Japanese manufacturers' business sentiment fell to a near nine-year low in January-March.
The government is expected to cut its assessment of the economy in a monthly report due later this month, sources have told Reuters, highlighting the widening economic damage from the coronavirus.
Comments and Ideas:
Business sentiment is very important for an economy. If business are not feeling good about now and the future, they are most likely going to reduce their business activities, which might include less investment spending, less spending on machinery, less hiring or new or needed workers, less giving of bonuses and wage increases and so on. And even worse starting to layoff workers and or any term you want to use related to getting rid of workers.
Which of course means, if those workers lose their jobs there will be less spending in the economy, which of course means less sales for companies and then even more of the same from companies and the spiral downward will continue.
The government needs to find some positives in the economy and or provide some positives in even more measures to help the economy and or lessen the damage.
Have a nice day and be safe out there!
© 2020, Tom Metts, all rights reserved
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