BOJ holds off on more stimulus despite stalling inflation

Abenomics, Banzai !

A society that depends on people buying stuff, especially stuff they don't need, is pretty sick.

Japan’s core inflation rate, which excludes volatile food prices, edged down 0.1% in September while household incomes and spending also fell, the government said Friday.

In basebal terms, that's 0 for 3. Missed the inflation target; household incomes declined; and, spending dropped as well. Not a pretty picture.

Incomes fell 1.5% ! Gov taxes raising here and there for individuals(my case). Company taxes dropping. Guess where the money flows !

That tight labour conditions haven't led to wage hikes suggests that some preconditions required for this dynamic to take hold are not present in Japan's economy.

I think a couple of preconditions are 1) a flexible labour market and 2) drastically improved growth prospects to encourage both labour and businesses to take more risks (by switching jobs or attempting new business ventures).

Abenomics hasn't delivered on either precondition, it's only delivered on destroying the strength of the currency, which alone isn't enough to make the economy great. Abenomics needed to be a complete package.

Poor Haruhiko Kuroda delivered on his promise, but Abe failed to deliver on his. (AP even got Kuroda's first name wrong, poor fellow...)

The downward spiral!

Too few young families with too few kids making too little income leads to too little consumption of goods and services, and the wealthy getting all the benefits of corporate greasing and monetary easing just can't buy enough to stimulate the economy for Abe's trickle down policy to even come close to working. Welcome to the new normal.

And BoJ reluctant to do more as they realize its just not working.

I refuse to buy things I do not need just to help the economy. There is something wrong with capitalism in that respect, but I have no fix or solutions.

Everyone said this would happen. No one listened

Getting consumers and businesses to spend more, a key aim of Prime Minister Shinzo Abe’s economic policies, has so far proven difficult.

ok...stretch neck muscles, sway hips and back, FIRMLY plant feet on the ground, inhaaaaaalllle a grand breath of air, arms stretch back, back arched, eyes closed....hold it....hold it........SLAM open eyes and with the force of a thousand typhoons exhale with all of your might.

WHY WOULD ANYONE THINK IT WOULDNT BE DIFFICULTTTTTTTTTTTTAAAAAAAARRRGGGGHHHHHHH!!!!!!!!!!!

for heavens sake....

Yet another round of reneging by the J-Gov and banks. Abe and his cronies sold the tax increases to the public with promises of economic stimulus packages to offset the burden. However, the part of the community that got stimulus was big business in the form of tax cuts, which they did not pass on to workers as pay rises. - Liarnomics!

Abe will go down in history as the PM who destroyed Japan and brought it to its knees. That's his legacy. The scary thing is I don't really think he cares.

A society that depends on people buying stuff, especially stuff they don't need, is pretty sick.

I thought that was the idea. It is only in developing economies where there is latent demand. Mature economies need to keep convincing people to buy stuff they don't need, hence the massive "education" system otherwise called advertising and planned obsolescence stoked also by fashion.

Who in their right mind would invest into the moribund Japanese economy? Certainly, not Japanese companies nor the Japanese government with it's massive tranche of loans to other developing countries like Vietnam, Uzbekistan,Mongolia etc. My investments are 100% non Japanese and I am well rewarded for it! The Japanese are royally screwed.....

Japans economy has been stuck in the doldrums since the 80,s atleast Abe san is trying to get it up and running again, these thing take ages to get going its not an over night fix, it may take 2-3-4-5 years to get better, if you think that Abe is doing the wrong thing for Japans economy, its better then what happened since the 80,s give it time!!

Prime Minister Shinzo Abe’s economic policies are aimed at getting consumers and businesses to spent more, both by keeping interest rates at record low levels and by fostering expectations that inflation will erode future purchasing power.

For how many more years are these bogus lines going to be trotted out in every article about the Japanese economy? One, trying to get people to spend more by keeping interest rates low is just code for trying to get the private sector to go deeper in debt. Which kinds of means you don't understand that the reason your economy has stopped growing is that the private sector can not take on any more debt. Like saying "We think the problem can be solved if it will just somehow magically go away". Two, of all the ridiculous "theories" in economics, "inflationary expectations" might be at the top of the list for ridiculousness. Virtually all spending decisions are based on either necessity or affordability, and of the very few spending decisions that people might delay because they think prices are coming down, they don't wait forever. Nobody would have bought a computer in the last 20 years if they based their decision on "inflationary expectations". As for rushing out to buy now cause you think prices are going up, big deal, you buy now instead of later. Only possible effect of either case is to shuffle spending between accounting periods, overall effect on economy is zero.

Central bank asset purchases are injecting tens of billions of dollars of cash into the economy each month.

Another piece of nonsense that gets parroted over and over. Asset purchases inject a total of zero yen into the economy. They inject money into bank reserves, and bank reserves do not circulate in the economy. Any money that gets injected into the economy is only injected indirectly, if somebody spends more money because their assets have gone up in value due to the central bank boosting asset prices. It's questionable how big this "wealth effect" actually is (likely not very) but in any case it is not a case of "the central bank injecting the money into the economy" as claimed over and over.

But as always, the government has to say something and the media has to write something, so expect the gibberish to continue for a long time.

I agree the whole inflationary expectation theory of consumer behavior is just rubbish.

I counted at least 5 mandatory taxes that most Japanese families pay. In addition to utilities,phone etc Japan is a country is an expensive place to live.....to say that we need higher places is pure nonsense!

Abenomics = The single greatest economic failure of the industrial / post-industrial age. Everyone outside of Japan with a basic understanding of economics and an ounce common sense knew Abe's policies would not work. Abenomics was a huge scam to spend unthinkable amounts of taxpayer funds at enrich Japanese politicians and bureaucrats at the expense of the public. I wish Japanese people had listened to the warnings.

The official definition of inflation, before it was changed by the US government was : an increase in the money supply. When you buy bonds with printed money out of thin air, like the US has, you've increased the money supply. That prices do not increase in things measured by the government is irrelevant. Since banks and governments get the money first, the price of financial assets and government worker salaries and benefits goes up first. The next benefit for governments devaluing their currency, is that when that government is either the largest debtor nation in the world, like the United States, or has the highest debt to GDP ratio of any industrialized country, like Japan, it makes the debt easier to pay off, while eroding the purchasing power of its citizens. In other words, its a tax, but the way its spun, is that its for economic growth. Governments throughout history, for thousands of years, have tried to print more money to become bigger, spend more, and have gone deeper, and deeper into debt. Eventually the currency loses so much value, like in Brazil in the 70's, and Argentina now, that people will spend their entire paycheck as soon as they get it, because the price of food at the grocery store might double the next day. So its no surprise that gold has been money for over 5,000 years because: it can't be printed out of thin air; it's not paper and has intrinsic value of a rare metal, can be divisible; doesn't rust and lasts forever; and can be transported easily. ( unless you have a ton)