Japan’s revenge

Over at Project Syndicate, Thomas Palley outlines the argument about how the yen carry trade is fuelling global asset bubbles — although Finance Minister Omi denies that Japan's low interest rates are the cause of the carry trade.Aside from rehearsing the standard arguments about how Japan's barely-over-zero interest rates contributes to global instability and the …

Continue reading Japan’s revenge

Much ado about nothing in Essen

So the meeting of G7 finance minister and central bank presidents has concluded, and, despite grumbles from the Democratic US Congress and the EU's ECOFIN about the weakness of the Japanese yen, the final statement in Essen included nothing that directly referred to Japanese monetary policy.Instead, the only country named directly in the paragraph on …

Continue reading Much ado about nothing in Essen

Open Stackelberg Warfare in Japan

I have previously noted tension between the Bank of Japan and Abe Shinzo's governing coalition regarding the timing of the next round of interest rate hikes. It seems that that tension has become open warfare between monetary authorities and LDP and government officials in advance of this week's meeting of the BOJ's Policy Board.As this …

Continue reading Open Stackelberg Warfare in Japan

Nikkei sends a warning shot across the bow

Nikkei's lead editorial today discusses a meeting this week between Prime Minister Abe and BOJ President Fukui.The meeting itself was uneventful, but Nikkei uses the occasion to warn of undue political pressure by the government on the BOJ in advance of the 2007 elections. It concludes with a call for the government to respect the …

Continue reading Nikkei sends a warning shot across the bow

Takenaka criticizes Fukui (and the Abe cabinet?)

With the Bank of Japan sending signals that it will raise Japan's interest rates soon, Takenaka Heizo, former Prime Minister Koizumi's point man on the economy and structural reform, has criticized the BoJ (and implicitly its president) for prematurely tightening monetary policy, reports the FT.For a high-ranking "Koizumian" to criticize Japan's monetary policy -- which …

Continue reading Takenaka criticizes Fukui (and the Abe cabinet?)