BOJ Chief: Financial Markets Unstable: Updated September 2, 2024.

 

BOJ chief says financial markets remain 'unstable,' watching closely

Article Source:  https://mainichi.jp/english/articles/20240823/p2g/00m/0bu/022000c

Ideas:

There are many ways financial markets can become volatile, or change a lot. Any bad news or not so good news can cause a change and any good news too can cause a positive change.

The Bank of Japan most likely will not change anything soon as long as the Japanese economy is not where they think it should be. They most likely will not increase the rate until maybe October or November at the earliest, as they are waiting for the Japanese economy to settle down after the summer season and the typhoon season.

If there is before then more turbulence in the markets, for sure, the BOJ will say the same thing and wait for a better time.

If the rate hike that was just recently done, if it has too much negative affects on the economy, again, they might wait for a better time.

The BOJ has trying to find ways get out of the ultra-low policy situation that it has been in for almost a decade, but there are just too many parts to be unraveled and it might take some time.

The weak Japanese yen, has both positives and negatives so the BOJ has to look at all sides and figure out what is best for the Japanese economy.

Some have suggested the the Japanese yen is controlling the Bank of Japan and then most likely the Japanese economy. 

That might be so, but to be fair the the Bank of Japan, but besides currency manipulation, which they can't do or shouldn't do, there is not they can do, except try to increase the key rate and get it as close the US rate as possible.

But the problem with that is, there might be too many side affects for the Japanese economy to overcome, which is continuing to be stagnant at this time.

Agreed, for the most part, the Japanese economy has not been a state of deflation for a long  time as inflation continues to control the economy with companies continuing to increase prices.

The 0.25 percent and the 0.1 percent range is not going to affect many Japanese households or businesses. When the rate gets up near 1.0 or 1.5 then it might begin to have some affect on the economy from businesses to households.

For a long time, and maybe true, the BOJ was hesitant to increase the rate as they said the Japanese economy was just to weak.

Unfortunately, whether good or bad, the stock market, globally, reacts to everything and not in a good way as they are like a young child reacting to everything some says or does.

The BOJ should use caution because, again unfortunately, the markets see everything and react to everything, including a one word phrase or something they might not like.

But the BOJ is not going to do anything soon related to increasing the rate, as the hot summer season is continuing and the typhoon season has started in Japan,which is is going to play havoc on the Japanese economy.

So most likely not until October or even November, the BOJ might increase the rate just a little but not too much, as they don't want to have any side affects from the future rate increase.

Have a nice day and be safe!