Bank of Japan Update: Updated Feb.20, 2024

 

Bank of Japan set to retain monetary easing with focus on end to negative rates

Article Source: https://mainichi.jp/english/articles/20231218/p2g/00m/0bu/010000c

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Ideas:

The Bank of Japan has always been an outlier, at least since the last decade and it felt a low ultralow policy was the best way to grow the economy. And at the same time, as the Japanese economy has not been that strong, it felt the Japanese economy wasn't strong enough to handle key rate increases.

The Bank of Japan, in 2024, might begin to change its ultralow policy, but most likely it will do it in very small incremental changes, and the BOJ doesn't want to cause any harm to the financial markets.

The Japanese stock market is on run increasing to its highest level since 1991, and the BOJ doesn't want to do anything that might distract from the momentum of the Japanese stock market.

Inflation might still be a major challenge in the Japanese economy even though it might have decreased to 2.9 percent from 4.2 percent. But even at 2.9 percent, for some income groups that might still be too much.

Yes, the US Federal Reserve has not increased the key rate for sometime, and plan to lower the rate in the coming months as the US economy, is again, the strongest in the world.

But back to Japan, not to get too far ahead, the Japanese economy has moved into a textbook style economic recession, with two consecutive quarters of negative economic growth considered a recession.

The fact that maybe Japan has slipped into a recession, again, might mean the Bank of Japan will delay any changes in its ultra-low policy until the Japanese economy improves, if ever.

Its seems the Japanese economy just can't get out of the inflation stage and or even the stagnation stage and or even the deflation stage, which its been stuck in for maybe a decade.

If the 90's were the lost Japanese decade then since 2010 its been the lost decade 2.

Its been suggested that in the 1980s' the Japanese economy grew too fast and neve established the real foundation for continued sustained economic growth and today the Japanese economy might be seeing the results of too fast economic growth, which is what South Korea is going through today too and maybe even China today too.

Have a nice day and be safe!