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Govt can intervene in FX market if Yen moves are very unstable – BOJ’s Kiuchi

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 25, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Additional headlines crossing the wires from BOJ’s lone dissenter, Takahide Kiuchi, here as under:

    On monetary policy –

    Continued easing won't have additional effects

    BOJ should shift its policy focus to sustaining

    financial system stability from price stability

    Costs may outweigh merits if japan tries to stimulate economy with monetary policy alone

    Negative rate policy to lower real interest rates

    But negative rate policy has side-effects

    Negative rates to make it hard for boj to buy jgbs
    Too early to conclude pros and cons for economy of last month's decision to adopt negative rates

    It is becoming difficult to push down real interest
    rates as inflation expectations falling globally

    Personally think it's becoming increasingly difficult to find further effective steps to achieve 2 pct inflation target

    On the domestic currency -

    Negative rate policy not aimed at weakening yen

    There may be room to strengthen dollar swap agreement among central banks

    It’s uncertain whether trying to weaken yen further would be good for japan's economy

    Government can intervene in FX market if Yen moves are very unstable, which means BOJ shouldn't buy foreign bonds to influence FX rates
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