Wednesday, March 26, 2003

New BoJ Governor: Actions Will Speak Louder Than Words


The traditional sport of governor watching will take a new turn this week with Toshihiko Fukui taking over as governor of the Bank of Japan on Thursday. Commentators are already hanging on his every word looking, almost hope against hope, for some sign of change. My own view is we will have to wait: to wait and see what lies behind the
Why All the Fuss About Deflation

Deflation is a generalised and sustained fall in prices, with the emphasis on generalised and sustained. At any given time, especially in a low-inflation economy like that of our recent times, prices of some goods and services will be falling. Price declines in a specific sector may occur because productivity is rising and costs are falling more quickly in that

Monday, March 10, 2003

Effects of Information Technology and Aging Work Force on Labor Demand and Technological Progress in Japanese Industries: 1980- 1998
Kiyohiko G. Nishimura, Kazunori Minetaki, Masato Shirai, Futoshi Kurokawa

This paper raises many very important issues relating to the continuing economic crisis in Japan. In particular insofar as it relates to questions concerning the impact of new technologies on
To Monetise or Not to Monetise, That is not the Question

Curious how almost everyone who's anyone in New York or Washington thinks that the Japanese problem has a monetary solution, while almost everyone who's anyone in Tokyo disagrees. This time it's the turn of Morgan Stanley's Robert Alan Feldman.Is it too late for Japan? The monetization is now complete along the yield curve. European
Japan: Let the Fiddler Play On


More on divining the entrails in Japan. Much recent western comment has been mildly optimistic on the possibility of serious change and reform in Japan. Japanese commentators meanwhile, when not actually banging their heads against the wall, seem to spend most of their time tearing their hair out. This piece from the Asahi Shinbun's Senior Staff writer is pretty
Japan: Which Side Are You ON?


I'm posting this piece from Morgan Stanley's Takehiro Sato since, apart from anything else, it is a hoot. Trying to make sense of what happens in Japan is difficult at the best of times, but when a market oriented party starts to socialise the economy, and the ex-communists begin to demand market based measures, well, I think we move from the world of the sublime
If there is one thing I have learnt in following the Japanese economy closely over the last couple of years it is that, as far as Japan is concerned, you should take everything with a big pinch of salt. Still, the Nikkei is at a twenty year low, that is real and that is a fact. This week Forbes suggests it could fall below the 8,000 level, and that with year-end book-balancing in sight. They also
Down and Down We Go Again


Of course, all this continuing economic uncertainty is doing nothing to revive interest in buying shares in the stock markets. Yesterday it was Japans turn with the Nikkei howevring near two decade lows and the Topix falling straight through.Tokyo shares fell on Friday morning after a speech by George W. Bush, the US president, increased market nerves, while a report
Japan: Long Term Yields Continue to Fall


Yes, deflation in Japan is definitely settling down for the long haul. Ten year yields of government bonds hit a historic low of 0.74 per cent today indicating that investors have no belief in recovery any time soon. One passing thought, all the commentaries on Japan make the comparison with 1930s style dramatic deflation. But what we are seeing in Japan