Financial Times (January 21)
“In a country where companies have resisted raising pay and the workforce has refrained from aggressive salary demands for most of the past three decades, Fast Retailing’s move is a watershed for the government and the Bank of Japan’s battle to lift the economy out of deflation.” Should the approach gain momentum, “the ramifications could be far-reaching,” potentially leading to “a virtuous cycle of rising wages, consumption and prices” that “would allow Japan to finally move away from the negative interest rates and ultra-loose monetary policies.”
Tags: BOJ, Consumption, Deflation, Demands, Economy, Fast Retailing, Interest rates, Japan, Prices, Raising pay, Rising wages, Salary, Ultra-loose, Virtuous cycle, Watershed, Workforce
Wall Street Journal (January 10)
“Based on the growth of the money supply, Japan clearly fails to qualify as ultra-loose. On the contrary, it has been ultra-tight for decades.” Based on the quantity theory of money and Milton Friedman’s insights, “that tightness put Japan right where anyone… would expect: with ultra-low inflation.” That’s right, “Japan’s ultra-low inflation rates have been the result of ultra-tight, not ‘ultra-loose,’ monetary policy. The Bank of Japan’s attraction to this fallacy has resulted in Japan’s lost decades.”
Tags: BOJ, Fallacy, Friedman, Growth, Japan, Lost decades, Monetary policy, Money supply, Rates, Ultra-loose, Ultra-low inflation, Ultra-tight
Reuters (July 29)
“The Bank of Japan meets on Tuesday and might be doing some ‘jinarashi’ i.e. preparing markets for some changes to its unique, ultra-loose monetary policy.” With five years of mixed results, as well as “a global trade war now threatening trouble for its big exporters and zero interest rates hurting its banks, the BOJ seems to have recognized that something needs to give.”
Tags: BOJ, Exporters, Global trade war, Japan, Jinarashi, Mixed results, Monetary policy, Ultra-loose, Zero interest rates