http://ex-skf.blogspot.com/2013/01/japans-debt-bomb-delayed-somewhat-as.html
Financial and fiscal insanity has been the norm since September 2008. Japan is merely a lap or two behind, now frantically trying to catch down with the US Fed and the ECB in cheapening the currency and going full-speed on further fiscal profligacy.
Bank of Japan just announced the result of its two-day deliberation on monetary policy. It will officially target 2% inflation, and unlimited quantitative easing through asset purchase of whopping 13 trillion yen (145 billion US dollars, take that Helicopter Ben!) per month, but the latter won't start until January 2014.
Japan's Nikkei ended slightly down, at 10,709, in mild disappointment that the open-ended QE is not going to start right away.
A token independence of the central bank is gone, as the inflation target will be closely examined by the executive branch of the government every three months.
From Nikkei Shinbun (1/22/2013; part):
and....
http://www.zerohedge.com/news/2013-01-21/japan-unveils-extreme-and-totally-expected-fiscalmonetary-policy-plan
Submitted by Tyler Durden on 01/21/2013 22:50 -0500
MONDAY, JANUARY 21, 2013
Japan's Debt Bomb Delayed Somewhat, As BOJ Targets 2% Inflation But Open-Ended Asset Purchase of 13 Trillion Yen (US$145 Billion) Per Month Delayed Till 2014
Financial and fiscal insanity has been the norm since September 2008. Japan is merely a lap or two behind, now frantically trying to catch down with the US Fed and the ECB in cheapening the currency and going full-speed on further fiscal profligacy.
Bank of Japan just announced the result of its two-day deliberation on monetary policy. It will officially target 2% inflation, and unlimited quantitative easing through asset purchase of whopping 13 trillion yen (145 billion US dollars, take that Helicopter Ben!) per month, but the latter won't start until January 2014.
Japan's Nikkei ended slightly down, at 10,709, in mild disappointment that the open-ended QE is not going to start right away.
A token independence of the central bank is gone, as the inflation target will be closely examined by the executive branch of the government every three months.
From Nikkei Shinbun (1/22/2013; part):
日銀は21～22日に開いた金融政策決定会合で、２％の物価安定目標を採用することを決めた。政府との間で「デフレ脱却と持続的な経済成長の実現のための政府・日本銀行の政策連携について」とする共同声明を作成。消費者物価の前年比上昇率で２％を目指すとともに、経済財政諮問会議で進捗状況を定期的に検証することなどを決めた。Bank of Japan adopted the price stabilization target of 2% after the two-day meeting on monetary policy. A joint communique with the national government is to be drawn up regarding "the joint policy effort between the national government and Bank of Japan to move away from deflation and achieve sustainable economic growth". The target of 2% increase of year-over-year consumer price will be set, and the target will be periodically examined by the Council on Economic and Fiscal Policy [under the Cabinet Office].
２％の物価安定目標の導入とともに、資産買入基金で「期限を定めない資産買い入れ方式」の導入も決めた。新方式では2014年初から期限を定めず毎月13兆円の資産買い入れを実施する。買い入れの内訳は長期国債が２兆円、短期国債が10兆円。その他の資産は残高を維持するように買い入れる。この結果、基金の残高は14年中に10兆円程度増え、それ以降も残高を維持する見込みだ。基金の新方式については全員一致で決めた。
In addition to the introduction of price stabilization target of 2%, BOJ decided to introduce a new open-ended asset purchase program using the asset purchase fund. Under the new program, BOJ will purchase assets at 13 trillion yen [145 billion US dollars] per month for as long as necessary starting in the beginning of 2014. The assets will include 2 trillion yen long-term government bond, 10 trillion yen short-term government bills, and the rest of the assets [REIT, ETF, commercial papers, corporate bonds, etc.] will be purchased to maintain the existing balance. As the result, the balance of the asset purchase fund will grow by 10 trillion yen in 2014, and the balance will be maintained thereafter. BOJ decided on this new program by unanimous vote.Interestingly, Nikkei English article does not mention monthly asset purchase of 13 trillion yen. Instead, it has a piece of information that is not in the Japanese version - that there were two people who dissented at the BOJ meeting over 2% inflation target:The bank's policy board voted 7 versus 2 at the end of its two-day meeting to introduce the target, replacing its current 1% price "goal," which Mr. Abe had criticized as being too weak of a commitment by the BOJ.I wonder who they were.
But to call the 2% inflation target as "price stabilization target", that's pure Newspeak. Japanese people will be lulled by the word "stabilization", without realizing it is the past 2 decades that have had excellent price stability.
and....
http://www.zerohedge.com/news/2013-01-21/japan-unveils-extreme-and-totally-expected-fiscalmonetary-policy-plan
Japan Unveils Extensively Priced In "Open-Yended" Monetization News
- *BOJ TO ADOPT 2% INFLATION TARGET
- *BOJ WILL INTRODUCE OPEN-ENDED PURCHASING FROM JAN 2014
- *BOJ TO BUY 2T YEN OF JGBS MONTHLY FROM JAN 2014
- *BOJ TO BUY ABOUT 10T YEN OF T-BILLS MONTHLY FROM JAN 2014
- With epic amounts of JPY shorts and NKY longs, JPY was notably bid versus the USD (from Friday's close) going in, 30Y JGBs bid relative to 10s, and the NKY and TOPIX were leaking lower. Now is the time to see just how effective this efficient market is at pricing in the stabilization-to-retaliation phase of the current actions. Though of course, there is no intent to cough-'weaken'-cough the JPY:
- *AMARI TO SAY AT DAVOS NO POLITICAL INTENTION TO MANIPULATE YEN
So, as expected, the BoJ joins the Fed and ECB on the unlimited "open-yended"(TM) printfest bandwagon. So far JPY is not totally impressed.From our reading there is no change until Jan 2014 at which point the BOJ will monetize about 13 trillion in JGBs split between 2 trillion in BIlls and 10 trillion in bonds - perhaps giving cover for Aso's G-20 comments? or just as with the ECB, the mere threat of 'unlimited' easing is thought to be enough. Or, simpler, the BOJ wants its cake - lower JPY - and to eat its low bonds too...But importantly from a flow standpoint nothing has changed, and nothing will change for the next 12 months. How Japan will get the sustainable cash inflow to push inflation to 2% in the interim is anyone's guess...
and close-up - 40 minutes to bring it all back...
On the fiscal side:- *ASO SAYS NEXT FISCAL YEAR'S BUDGET WILL BE TIGHTER
- *ASO WANTS TAX INCOME TO EXCEED NEW BOND ISSUANCE IN FY13 BUDGET
- *ASO SAYS GOVT, NOT BOJ SHOULD BE RESPONSIBLE FOR EMPLOYMENT
On the monetary side:
So between now and January 1, 2014.... nothing??BoJ1 byBoJ2 byand.......http://www.zerohedge.com/news/2013-01-21/japans-deputy-prime-minister-has-modest-proposal-edlerly-hurry-and-die
Japan's Deputy Prime Minister Has A Modest Proposal For The Elderly: "Hurry Up And Die"
Submitted by Tyler Durden on 01/21/2013 22:13 -0500
Everyone knows that Japan, whose population is now at the oldest average age it has ever been in its history, sold more adult than baby diapers for the first time in 2012, and is "older" than any nation in the world, has a "demographic problem." What few may know, however, is that it also has a secret plan to fix said "demographic problem" - a solution that would make Hitler, Goebbels and Stalin proud. Earlier today, Taro Aso, 72 years young, and the deputy PM of the man set to unleash Abenomics on Japan (for the second time, only this time it will be different), suggested that the elderly in Japan should just "hurry up and die"because "You cannot sleep well when you think it's all paid by the government."
Uhhhmmm....Remember that this is the nation that the US is set to imitate at all costs: in everything from the rising debt/GDP, to the interest as a % of revenue, to the demographic distribution of the population, to the absolute collapse in its export base, to, well, everything. And, perhaps, one day to the treatment of the elderly. Because unlike the US, Japan does not have an insolvent Social Security Fund and underfunded liabilities that amount to about 10 times its GDP. Ironically, in the perspective of benefits promised to its society, Japan is in a better place than even the US. But why worry about that now: there is an inauguration going on, and everyone is discussing what the FLOTUS is wearing.But back to outspoken Aso. From the SCMP:The 72-year-old Aso, who has a reputation for speaking insensitively, was addressing a meeting on social security issues on the burden imposed by prolonging patients' lives with treatment.
Describing patients with serious illnesses as "tube persons", Aso said they should be allowed to die quickly if they wanted to, Kyodo News reported."Heaven forbid I should be kept alive if I want to die. You cannot sleep well when you think it's all paid by the government.This won't be solved unless you let them hurry up and die."He later retracted some of his remarks and admitted it had been inappropriate to make such comments in public. They were his personal opinion, not government policy, he said.Aso became something of a figure of fun during his brief stint as prime minister in 2009, during which he told a group of university students that youngpeople should not get married because they are too poor and, because they don't earn much money, they are not worthy of respect from a life partner.That insight was followed by a declaration that followers of the world's religions should learn from Japan's work ethic."Our values in Japan regard work as important. To work is good. That is a completely different way of thinking to the Old Testament. We should share that philosophy with other nations."Aso has a reputation for not always thinking through his public comments. He had offended doctors by saying many of them "lack common sense"; the Democratic Party of Japan for comparing it with the Nazi Party; people with Alzheimer's disease and also China, which he described as "a significant threat".And these are the - somewhat aged to be perfectly blunt here as well - people on which the western capital markets have staked their hopes for a return to prosperity and monetary utopia? Just when does the world admit to itself it has a peak desperation problem?
In the most anticipated (and likely most strawman/leaked) policy actions, the BoJ and the Japanese government (still independent entities theoretically) have unveiled the new monetary policy to complement the $116bn fiscal stimulus plan to boost growth:
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