business

BOJ holds fire on fresh monetary stimulus

18 Comments
By ELAINE KURTENBACH

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Japan’s central bank opted Thursday not to expand its massive stimulus policies to boost growth,

Funny, the 17 previous stimulus programs did not increase growth, I guess the BOJ finally got the message that the 18th attempt would probably fail as badly as the previous 17. I

1 ( +3 / -2 )

"BOJ Gov. Haruhiko Kuroda has said he will do whatever it takes to attain an inflation rate of about 2 percent, which the government’s planners say is crucial for spurring growth."

The inflation rate he said he would reach by last year?

Even Crazy Kuroda doesn't know what to do anymore.

0 ( +2 / -2 )

BOJ Gov. Haruhiko Kuroda has said he will do whatever it takes to attain an inflation rate of about 2 percent, which the government’s planners say is crucial for spurring growth.

This is so comically stupid that it hurts to laugh at it. Exactly how does 2% interest spur growth? Inflation is a tax by which the government takes the value of your money rather than going to the trouble of taking the money itself. Devaluing people's pay and savings does not spur growth in any way, it does the opposite, as their pay doesn't go as far as it did before, and they need to save even more to make up for the loss of value to their savings accounts. Inflation has always been a devious government practice to steal the assets of the people, and to hear it called as essential to growth is absurd, it is only essential to the growth of government spending and debt management.

Some idiot will probably say that this is the fault of companies, who refuse to raise employee wages. But don't forget that inflation also robs companies of the value of their revenue and holdings, meaning that they cannot simply raise wages to compensate. And next, with the population falling rapidly, falling by one-third over the next three decades, there is absolutely no hope of increasing domestic sales, revenue, or wages.

I wonder what kind of people work as government planners? People too stupid to get a job sweeping streets or making rice balls I guess.

2 ( +5 / -3 )

a lack of confidence among households whose buying power remains the key to sustained growth.

They ain't going to get no buying power until the government permits unleashed economic growth through market reforms.

an inflation rate of about 2 percent, which the government’s planners say is crucial for spurring growth.

Wrong prescription from the government planners. Deflation (mild as it is) is a symptom, not the cause of Japan's economic woes.

Japan’s benchmark Nikkei 225 index erased earlier gains, falling 3.6 percent

Evidence that Japanese stocks live only for central bank money manipulation. Sad state of affairs.

Some idiot will probably say that this is the fault of companies, who refuse to raise employee wages.

Yes, I'll bet, but lets not call them idiots. They just have it totally wrong.

0 ( +1 / -1 )

Maybe Kuroda heard about a place named Zimbabwe?

-1 ( +1 / -2 )

Personally I don't doubt that Kuroda will do more, but until now he's tended to only do more when it wasn't expected. (Last time around he was saying that the BOJ wasn't considering negative interest rates, right before the BOJ implemented negative interest rates.)

The crashing Japanese stock market may force his hand next time though, who knows. Abe's got an election to buy this summer, so plunging Japanese stocks and the value of the GPIF's "investment" in them won't do!

It'll be interesting to see where the Nikkei 225 starts after Golden Week is all over.

0 ( +1 / -1 )

Large (and small?) companies in Japan don't pay taxes.

I've read this posted on here more than a few times but it's never been explained and I don' know. Anyone not doing anything important care to give it a try? Thanks.

0 ( +1 / -1 )

I think Kuroda now realizes that Abe will never enact any fiscal or regulatory reform. When Kuroda became the head of the BOJ, it was still believed that Abe would push through fiscal reforms and deregulate the economy. Neither happened. Not only were there no fiscal reforms, but government is spending even more foolishly than before Abe came to power. As for deregulation, nothing has yet been done.

Without substantial reforms in the economy, there is no point in further easing or rate manipulation, it is merely rearranging deck chairs on the Titanic.

Kuroda may be twisting Abe's arm to get him to act, but he had better not hold his breath.

0 ( +2 / -2 )

Can't beat it then join it. The world economy is on brink of recession again. Where's the bright spot?? Would like to know.....

0 ( +0 / -0 )

"Anyone not doing anything important care to give it a try? Thanks."

I used to drink regularly at a tiny bar with about 8 seats total. About the size of a walk-in closet. One night the "master" was complaining about business. I said, "Well, at least you don't have to pay any taxes." He looked at me like I had just peeed on his shoes and said: "The hell I do! I pay plenty of taxes!"

-2 ( +1 / -3 )

Gold is up almost $20 an ounce today after this announcement made the dollar weaker against the Yen, in addition to the Federal Reserve move NOT to raise interest rates. The scheme of central bank round coordinated devaluation is coming to an end because the Shanghai physical gold market which opened on April 19th, 2016 is causing arbitration in the paper market of COMEX. In other words, paper gold contracts are being replaced by the real thing. There's a reason why gold has been money for over 5,000 years: governments can't print it up from thin air.

-1 ( +1 / -2 )

"The data had raised expectations that the Bank of Japan might tweak its stimulus efforts to prop up the recovery of the world’s third-largest economy."

I've been hearing about stimulus programs by the BOJ for 20 years as the cure for Japan's economic ills, but the end result always seems to be an ever-increasing mountain of debt.

0 ( +1 / -1 )

I've read this posted on here more than a few times but it's never been explained and I don' know. Anyone not doing anything important care to give it a try? Thanks.

Tax is paid on profit, and the business tax rate in Japan is very high (the second highest in the world). On average, 70% of Japanese companies are "loss-making", meaning that their expenses were higher than their profits, and therefore pay no tax.

At this moment I am preparing to pay my business tax, I have to submit my income, expenses, and bank statement to my accountant, who will figure out how much I owe. For better or worse, my business is part of the minority in Japan which is actually profitable.

0 ( +2 / -2 )

He looked at me like I had just peeed on his shoes and said: "The hell I do! I pay plenty of taxes! LOL yeah right plenty of taxes on the sales he declares, being only cash many small businesses only declare a portion of what they actually sell. My father inlaw co-worker quit his job in a large electronics company because of all the strees and heavyu work load, he opened a small takoyaki/okonomiyaki shop, he says he better off financially now than when he was working a full time office job

0 ( +0 / -0 )

When the yen bounced into the 120 to the U.S. dollar and 130 to the euro range, prices shot up everywhere ... easily passing the 2% inflation mark. Now that the dollar and euro are trading much lower, the prices remain the same across the board. Nothing happened. If the dollar and euro go back to the 120 and 130 ranges, will the prices shoot up even higher?

Kuroda keeps saying a 2% inflation rise is "close," but he's been saying this for a long time now. Does this guy ever do any shopping on his own? If not, he should. Then he would see how the prices have risen ... beyond his 2% target.

0 ( +0 / -0 )

@edojin,

As mentioned by Sangetsu03, majority of the Japanese companies have higher break even points to profits. With the adjustment in current exchange rates, the J-government outlook is that it will result in increase of marginal companies to more of a stability and the stable companies being more solid. If this happens, increase in employment might be a possibility.

0 ( +1 / -1 )

For better or worse, my business is part of the minority in Japan which is actually profitable.

Thanks Sangetsu03.

70% of Japanese companies are "loss-making"

Staggering. No wonder there's so much corruption with bid rigging, little brown envelopes and quality issues of food, construction, etc. One thing is for sure, I will never buy a brand new house here. Old house and remodel it myself AMAP, preferably, a foreclosed one.

0 ( +0 / -0 )

"70% of Japanese companies are "loss-making" -- Staggering."

No, not "staggering." Various reports suggest the ration of US companies that pay no corp. tax is much higher than in Japan. Over 90% according to this:

http://www.forbes.com/sites/timworstall/2014/12/23/more-than-90-of-us-businesses-dont-pay-the-corporate-income-tax/#3235855552c4

0 ( +0 / -0 )

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