When it comes to changing the "measurement" rules in the middle of the game, nobody does it quite like Japan: in the aftermath of the Fukushima nuclear explosion, when radiation was soaring (and still is with Tritium levels just hitting a record high but who cares - Goldman partners have to earn record bonuses on the back of the irradiated island) Japan's solution was simple: double the maximum safe irradiation dosage. Done and done.
Inflation is not just a pressure for businesses trading at home – it has a strong influence on the price of imported materials as well as the profitability of exported goods.
As we have seen in the UK, the concern of late has been higher than desired inflation. The Bank of England has a target of keeping inflation at 2 per cent, however the latest reading has it creeping up to almost 3 per cent.
Two days ago, when we posted ""Frustrated" Liquidity Addicts Demand Moar From BOJ As Nikkei Rally Stalls", we suggested that more QE from the Bank of Japan is just around the corner (and likely to take place as early as April) as the only real "driver" behind Abenomics, the surge in the stock market had stalled for nearly 6 months.
As reported previously the Bank of Japan, which not even the most optimistic central bank watchers had expected would unleash anything remotely as aggressive to prevent price discovery, stimulate asset prices and boost the exporting of deflation, became the latest central bank who, after a 5 to 4 vote, unleashed the monetary neutron bomb of Negative Interest Rates in the process pulling an anti-Draghi and shocking markets, even if admitting it can no longer boost QE due to previou
After a steady rise since November – sparked first by then-opposition leader Shinzo Abe’s campaign calls for bold monetary stimulus, and then fueled by Abe’s election as Prime Minister and the implementation of major easing measures in April – Japanese equity markets have turned choppy recently. A large selloff pushed the benchmark Nikkei 225 index down 20 percent in mid-June from a May 22 peak, and big swings in prices throughout the past month indicate that some investors are beginning to doubt the market’s staying power.
A very serious question that investors face today regards whether Japan is or isn't serious about politicians taking over Japan's central bank.
Personally, I think the politicians are serious, as well as "seriously wrong".
If you think that I am wrong, please consider Yen Declines After Abe Says He May Change BOJ Law.