Can The Efforts Of The Bank Of Japan To Boost Domestic Inflation Work?

Japan

President Kuroda Higashihiko said he did not consider the use of the so-called "helicopter money". This policy concept conflicts with the law.

Unlike the Bank of Japan's asset purchase and negative interest rate policy, "helicopter money" will obscure the boundaries between the central bank and the government's policies.

As inflation and economic growth continue to falter, Japan's policy debate has shifted to the concept of "helicopter money spreading" proposed by Nobel prize winner Milton 1969 (Milton Friedman) in 1969.

Such a policy may involve the government issuing short-term bonds directly to the Bank of Japan to increase the money supply, which is injected into the economy through tax relief or expenditure items.

"At present, in developed countries, fiscal policy is mainly decided by the government and the Congress.

The central bank's decision is separate from the government and Congress, "Kuroda Higashihiko said in the Japanese parliament.

"Make decisions about these things (helicopter money) and implement them.

There is conflict.

Therefore, unless the existing legal framework is amended, it is impossible to deploy money by helicopter. The Bank of Japan has not considered this policy at all.

A study conducted by Deutsche Bank also found obstacles in the law, pointing out that the central government's action to provide financial incentives is prohibited by the Fifth Law of Japan's public finance law.

However, analysts pointed out that according to the Bank of Japan act, the policy of the prime minister and Chancellor of the exchequer can be an exception to achieve the objectives of the central bank.

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The Bank of Japan's policy makers will meet next week and whether they will throw more stimulus when they arrive. In fact, they can find clues to a large extent from the day before their fed meeting.

The Bank of Japan believes that the appreciation of the yen is closely related to the interest rate policy of the US Federal Reserve. The Bank of Japan believes that the appreciation of the yen is closely related to the interest rate policy of the US Federal Reserve.

In a recent interview with the newspaper, Kuroda Higashihiko, governor of the Bank of Japan, pointed out that the gradual incremental interest rate scheme of the Federal Reserve helped to push up the yen exchange rate, which would undermine the efforts of the Bank of Japan to boost domestic inflation.

"Money market economists say that the Federal Reserve's monetary policy, especially...

In the next few months and even several quarters, the rate of interest increase will be even slower, which may have affected the exchange rate of the US dollar.

"We...

We will continue to closely monitor and assess the impact of this trend on inflation. "

When it comes to the appreciation of the yen, Kuroda said, "we need no further hesitation when we need further monetary easing."

The Federal Reserve will hold a meeting in from April 26th to 27th. Most observers believe that the US central bank will not raise interest rates this time, but we will pay close attention to the statement after the meeting to find a signal about the frequency of interest rate hikes in the future.

If they show a greater increase in interest rates, it is likely to further lower the dollar's exchange rate against the yen and other currencies.