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 …
Tag: monetary policy
Quantative easing continues
So the BOJ opted to raise interest rates by .25%. Ken Worsley has the wrap-up here.It seems that the effect on the carry trade will be negligible; the EU will no doubt still complain about the weak yen; and the BOJ's independence is still in doubt.
Interest rates, again
The Bank of Japan is due to consider once more tomorrow whether it is the right time to raise Japan's interest rates again.The last time, you may recall, the Bank's policy meeting was surrounded by a storm of debate surrounding comments by senior LDP and government officials questioning the wisdom of raising rates again (discussed …
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 …
Second time farce…
An embattled George Bush in the White House, a Democratic Congress riled up about Japanese practices to give itself an unfair advantage in international economic competition...is it 2007 or 1992?But seriously, as this FT article reports, Congress is pushing hard for Secretary Paulson to join with European governments to pressure Japan to raise interest rates …
Japan walking into a trap at Essen?
The G7 is due to meet in Essen, Germany this weekend, and there are dark rumblings that Japan may be called to account for failing to allow its currency to rise as the dollar falls, which has forced the euro to appreciate to a greater extent than the yen, which has remained the weakest of …
Will they or won’t they?
The "they" in the title of this post are, of course, the members of the Bank of Japan's Policy Board, and the 120.54 million yen question is whether its members will vote to raise interest rates on Thursday.Call me naive, but I'm used to the Fed's way of doing business, namely advertising the direction of …
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 …
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 …
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?)
Tobias S. Harris 