A critical decision

Bloomberg has a piece out describing the debate in Japan over the Aso government's plans for a new spending package, noting that "Japan’s 17-month recession is showing no signs of abating, and Aso may be tempted to attract rural voters with the pork-barrel projects that left the country with the world’s largest public debt." The Bloomberg piece adds that "some ruling Liberal Democratic Party

Japan - The Lost Quarter Century

Despite the fact that Japanese Finance Minister Kaoru Yosano said Friday that February's fall in the so called "core-core" consumer price index doesn't mean Japan is back in deflation, few are ready to accept his judgement. Indeed, if you look at the core-core line in the chart below, it is at least debateable whether the Japanese economy was ever out of it in the first place. But the present

Japanese savings shrink

The Nippon Keizai Shimbun is reporting today that "Japanese household financial assets totaled 1,433.5 trillion yen at the end of December, falling 5.7% on the year to a 4-year low, the Bank of Japan's preliminary data released Tuesday showed. This is the sharpest annual drop on record. Slumping stock and investment trust prices took a toll on household assets. Stock holdings plunged 40.2% on

Summary of Japan's economic situation

A commenter provided a link to Japan in trouble; India relatively safe, a piece in The Economic Times which states:"Some foresee Japan--one of the world’s biggest exporters--going bankrupt and its currency plummet if the situation doesn’t change near term. For years, the Japanese have relied on exports to support their economy... but exports have dried up given the severe recession in the

Effect of US government debt monetization on Japan

The yen has strengthened versus the dollar significantly in the short period since the US Federal Reserve announced that "the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to

Possible inflection point?

Bloomberg has a report headlined Japan’s Funding Crunch Deepening with the key item being that "The funding crunch for Japanese businesses is intensifying as foreign-currency financing dries up, forcing larger firms to turn to the nation’s state policy bank for emergency loans, the head of the lender said...JBIC, which provides funds to help bolster Japanese companies’ international

Update on QE in Japan

By Claus Vistesen: CopenhagenQuantitative easing is certainly all the rage at the moment after this week saw the Bank of England move interest rates down 50 basis points to the level of 0.5% and, effectively, into QE. Over at Morgan Stanley, Manoj Pradhan talks about a new global QE scheme even if we are not quite there yet, and David K. Miles and Melanie Baker talk about the UK version.