Article:
TOKYO (Reuters) - Japan must take "bold and unprecedented" steps to beat the economic fallout from the coronavirus, its economy minister said, suggesting large-scale fiscal stimulus is in the works as the government tries to fend off a recession.
Any spending package would add to support by the Bank of Japan, which is expected to ease policy next week to cushion the blow from the virus outbreak and shore up business confidence in the world's third-largest economy.
Plunging financial markets have added to a sense of urgency for global policymakers as they ready more measures.
"The government and the central bank share a strong sense of concern" about fallout from the coronavirus, economy minister Yasutoshi Nishimura said on Friday, signalling that a mix of fiscal and monetary steps are being prepared.
Comments and Ideas:
Both the Bank of Japan and the fiscal side of the government need to work together to insure there are no blind spots, and or no parts of the economy or society are left out and or missed. No monetary or fiscal program is perfect but both the BOJ and the fiscal side must coordinate their efforts to insure there are no groups, sectors, or those in society are left out.
Article:
"We must take bold and unprecedented steps," Nishimura told a news conference on expected government measures to mitigate the hit to households and companies from the health crisis.
Vice finance minister for international affairs Yoshiki Takeuchi told reporters the government and the BOJ "stood ready to work as one", as needed.
"We'll watch market moves with a stronger sense of urgency and act accordingly based on the G7 agreement," the country's top currency diplomat said after a meeting with his colleagues at the BOJ and the Financial Services Agency on Friday.
The remarks came in the wake of a conference call among the Group of Seven nations, which underscored the group's commitment to co-operate in tackling the coronavirus.
Japan is working on a new spending package of up to 20 trillion yen ($190 billion), including cash payouts to households and subsidies to tourism companies hit by a slump in overseas visitors.
Comments and Ideas:
All economies are globally integrated, as such countries also need to work in conjunction with each other to insure all markets are safe and secure.
Households, especially those with some who are being laid off and those who businesses are in trouble, need extra help to get them through this situation.
The tourism industry and companies in the industry need extra help to get them through this situation.
Article:
RUSH TO CASH
Global stock markets crashed this week as rising infections ended a years-long bull run, with panic selling hitting almost every asset class.
The rout even triggered a sell-off in near risk-free assets like Japanese government bonds (JGB), which saw prices tank as investors sold them to book profits to offset losses in stocks.
The BOJ conducted an unscheduled bond buying to stem the rise in yields, its first such action since 2018, but that did little to calm market nerves.
Finance Minister Taro Aso, however, appeared sanguine about moves in the yen, which Japanese policymakers pay very close attention to because of worries a stronger yen will hurt exporters.
"The yen has been stable at around 105 (to the dollar) recently so there's no need to fret about it," Aso told reporters on Friday, describing the underlying yen trend as "stable."
The yen tends to rise in times of financial stress as investors see the Japanese currency as a safe haven from risk.
Many market players see 100 yen to the dollar as Japanese policymakers' line-in-the-sand.
Comments and Ideas:
Sometimes policy makers will appear as if everything is stable and OK. Either they are trying to calm down the markets and or they don't want to cause undo worry about the markets. So in many instances they will take a cautious and or positive approach instead of saying all is bad etc.
The BOJ most likely will do use a lot of different tools and strategies to try and calm the markets. The BOJ has in the past mentioned it tools and strategies might be limited but it needs to find some new and innovative tools and strategies for the challenges in the economy and the markets.
Have a nice day and be safe out there!
© 2020, Tom Metts, all rights reserved
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