New York Times (February 18, 2014)
“Some analysts and public officials say the beleaguered euro zone is finally on the road to recovery…. But theirs is an overly optimistic view.” Europe risks falling into deflation “if government officials and central bankers do not take steps to bolster the economy.” Coordinated efforts would be ideal, but with European governments unlikely to work together “it is up to the central bank to act when it meets again next month.”
Tags: Analysts, Central bank, Deflation, Economy, Euro zone, Europe, European governments, Optimistic, Recovery
Financial Times (February 6, 2014)
“In an era when much of the world is worried about the possibility of drifting into Japanese-style deflation, one country has precisely the opposite problem: unbridled inflation.” Over the last 5 years, India’s consumer prices have been rising annually by close to 10%. “That is no small matter for the multitudinous poor, for whom escalating food prices can summon the spectre of hunger. Nor does it do much for macroeconomic stability, which India badly needs in this year of tapering and tricky political transition.” Fortunately, new central bank governor Raghuram Rajan looks “up to the task.” With his tough policies, he may prove the Paul Volcker of India.
Tags: Central bank, CPI, Deflation, Food, Governor, Hunger, India, Inflation, Japan, Macroeconomics, Paul Volker, Poor, Raghuram Rajan, Stability
Institutional Investor (June issue)
“Optimism is beginning to infect Japan’s corporate leaders–a crucial factor considering that the new policies must spur corporate investment and expansion if they are to succeed in fostering a sustainable economic turnaround.” Corporate leaders have welcomed Abenomics, but the jury is still out. “Corporate Japan will consider the new government successful if it can end the psychology of deflation and stagnation and offer the prospect of renewed growth. So far, business leaders are fairly optimistic.”
Tags: Corporate leaders, Deflation, Expansion, Government, Investment, Japan, Optimism, Psychology, Stagnation
Financial Times (April 18, 2013)
“The revival of Japan will be beneficial to the rest of the world, since it is also a process of evolution into a mature economy that can build win-win relationships with its economic partners,” writes Finance Minister Taro Aso. He continues, “the Bank of Japan has fired a monetary bazooka at deflation,” aiming to achieve 2% inflation. A “second bazooka” will seek to create private demand with flexible fiscal policy and the aim of boosting real GDP by 2%. Already, there is a dramatic improvement of economic and market sentiment. This “momentum must now be turned into a recovery.”
Tags: BOJ, Deflation, Economy, Finance Minister, Inflation, Japan, Market sentiment, Recovery, Taro Aso
Financial Times (April 7, 2013)
“After 20 years of hesitation Japan has stepped on to the economic tightrope. To do so is bold and necessary.” A decade earlier, the effectiveness of Abenomics would have been more certain. “As the years passed, the path that Japan must walk has narrowed, with continued deflation on one side or debt crisis on the other. That is no reason not to try. Disaster is otherwise inevitable, which is why the BOJ’s past reluctance to act was so infuriating. But there is no margin for error.”
Wall Street Journal (April 3, 2013)
“Japan’s quadrillion-yen market for government bonds is grappling with something it usually doesn’t face: volatility. Price gyrations are rising as bond investors try to assess how Prime Minister Shinzo Abe’s fresh attack on deflation will play out in a market accustomed to a steady decline in consumer prices and a cautious, predictable central bank.”
Tags: Abe, BOJ, Bond market, Consumer prices, Deflation, Investors, Japan, JGBs, Volatility
Financial Times (March 29)
“The challenge facing Japan’s new leadership in escaping from economic stagnation and deflation was underscored on Friday as data showed further declines in consumer prices and an unexpected contraction in factory output. Haruhiko Kuroda, the new governor of the Bank of Japan, could struggle to reach his goal of generating 2 per cent inflation in two years, analysts said, after the government data indicated core consumer prices fell 0.3 per cent in February compared with a year earlier.”
Tags: BOJ, Consumer prices, Deflation, Economy, Factory output, Inflation, Japan
Forbes (March 23)
“Forget Cyprus. A much bigger story in the coming weeks and months will be in Japan, where one of the greatest economic experiments in the modern era is about to begin. A country where government debt even dwarfs those of Europe’s crisis-ridden nations, Japan will attempt to inflate its way out of a 23-year deflationary spiral.” While the consensus seems to be that an accomodative monetary policy may jump start Japan’s economy, some fear it will instead “lead to a hyperinflationary disaster.”
Financial Times (March 3)
Prime Minister Shinzo Abe has acted boldly by appointing Haruhiko Kuroda as the next governor of the Bank of Japan. “Mr Kuroda has been appointed to end Japan’s one and a half decades of deflation. The attempt to do so will shake Japan’s economy and, maybe, the world’s. This shift is necessary but risky. It is likely to be destabilising, at least in the short run. Mishandled, the upheaval could end in disaster. But disaster was coming. Gamble now or fail later – that was the choice.”
Tags: BOJ, Deflation, Economy, Japan, Shinzo Abe
Financial Times (December 17)
“Shinzo Abe has been given a second chance. He should count himself lucky. Nothing in his first, truncated term merits another spell at the helm of the world’s third-biggest economy.” By focusing on the economy and acting to end deflation, Mr. Abe can “seize what looks like a rare opportunity.”“Shinzo Abe has been given a second chance. He should count himself lucky. Nothing in his first, truncated term merits another spell at the helm of the world’s third-biggest economy.” By focusing on the economy and acting to end deflation, Mr. Abe can “seize what looks like a rare opportunity.”
Tags: Deflation, Economy, Japan, Opportunity, Shinzo Abe
