Friday, January 29, 2016

Japan leaves rates against the negative effects of the global slowdown – Investing.com Spain

Andres Sanchez Braun

Tokyo, Jan 29 (EFE) .- The Bank of Japan (BoJ) today activated by surprise to complement its flexibilizer program and counteract the effects of the global slowdown is having on their goals for growth and inflation.

The company baffled with an announcement that follows the steps undertaken by the European Central Bank (ECB) to the middle of last year and from February 16 will leave first Once negative interest rates applied to deposits of financial institutions the Japanese territory.

The decision, designed to promote credit and investment, is also the first movement types in Japan October 2010, when the BoJ, under its former government team, stood at the very low level of between 0 and 0.1 percent, with the intention of bringing to third world economy stagnation.

The massive program of easing the central bank in April 2013 triggered Japan managed to reverse that trend, but not reap the rate of growth in the medium term, has proved sufficiently consistent and robust.

The slowdown in the Chinese locomotive and other emerging countries, linked to sharp falls in oil and commodity prices have eroded the impact it was having the “Abenomics” program name that economic reform of Prime Minister Shinzo was baptized Abe and the ultra-premium BoJ policy.

As today showed Japan’s CPI data, has neutralized the lowering of the price increase that the Japanese central bank pursues its massive asset purchase program and considers key to leave behind two decades of deflationary trend and settle a solid growth cycle.

The BoJ has today also cut its inflation forecast for the next fiscal year which starts in April in Japan -. from 1.5 percent to 0.8 percent

Also it delayed again its goal of achieving a price increase of 2 percent year -Objective originally intended to achieve in 2015 until mid 2017.

Thus, with the cut today by its board adopted monetary policy (which approved five votes to four) the issuing body -pensado complements its liquidity program to flood the system -. with a move intended to encourage banks to move their capital rather than park it

Some analysts have been quick to point out the possibility that this measure to reduce the so-called “idle money” in the archipelago not expected to take effect.

They argue that the Japanese private sector, rather than needing a credit expansion, now would require incentives to invest with greater confidence, which in his view would be achieved with the approval of a strong package of structural reforms.

The Tokyo Stock Exchange, which eventually closed up nearly 3 percent, welcomed momentary doubts action (selective went from earning 4 percent encouraged by the announcement of the BoJ to move almost at once in negative territory to trace later).

By the way and to dispel doubts in this market so volatile shown in recent weeks, the governor of the Bank Japan, Haruhiko Kuroda, said at a press conference after the quantitative easing program “has not yet reached its limit.”

In addition to insisting that the BoJ could continue cutting benchmark rates ” if necessary, “Kuroda wanted to make clear in this way that the institution is still stored some ammunition in the chamber against the view of some economists more defeatist, they begin to speak of” last rounds “.

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