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BOJ's Kuroda says Japan market conditions improving

20 Comments
By Stanley White

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World is in tears (Financial + Commodities + Boston Blasts) But only BOJ Gov. Kuroda is optimistic with $1.3tril injection (!)

0 ( +4 / -4 )

He said it yesterday, but let's see what happens today.

Abeconomics and Kuroda's pandering to institutional investors will leave Japanese poorer and even less inclined to have children.

The attempt to cement in place the modern-day feudal society with Institutional investors, politicians and bankers at the top and everyone else as serfs will heap misery on the young people of Japan.

inflation is not the friend of average Japanese because houses depreciate here.

The fed and BOJ are evil.

2 ( +5 / -3 )

I see the gov's and BOJ's intention being that an economic recovery comes before setting the national finance right. Good, but they haven't shown us HOW they will cope with around the ginormous national debt that could reach 240% of GDP if Japan's borrowing keeps going as it is now. Just tell us HOW. The EU nations, esp. The Irish, the Spanish, the Portuguese and the Cypriots, are living harder, working harder and thinking harder.

-1 ( +2 / -3 )

While these government fools basically LIE to the public, it might be a good idea to keep an eye on what private investors are doing. For example,

Says Takeshi Fujimaki, a Japanese advisor to Soros:

"By expanding the monetary base to 270 trillion yen, the BOJ is making a huge bet which I think it will ultimately lose," Fujimaki said in an interview in Tokyo on April 11. "Kuroda's QE announcement is declaring double suicide with the government. The BOJ will have to share the country's fate and default together."

Source: http://www.zerohedge.com/news/2013-04-14/ex-soros-advisor-sells-almost-all-japan-holdings-shorts-bonds-sees-market-crash-defa

-1 ( +2 / -3 )

Unfortunately, my salary is not going up. The boss told us he can't afford it.

2 ( +4 / -2 )

next up for kuroda and abenomics is trying to convince businesses to increase wages, which at this point ain't happening.

on the bright side of abenomics and all this, they might be running trains and subways 24/7. that would make all this worth it for me!

2 ( +2 / -0 )

Our salaries and wages are not going up, largely because both companies and we workers are really expecting future prices to rise only slowly and modestly. That really damps workers' demand for higher salaries and wages, and helps firms keep costs and prices down.

In other words, we are so used to deflation, recession and modest pay rise that we don't see a chance to raise our future expectations, unfortunately; we are all so stuck in the economic gutter that we think, "Low pay is better than no pay."

0 ( +1 / -1 )

but they haven't shown us HOW they will cope with around the ginormous national debt...Just tell us HOW.

It's kinda obvious. Once GDP picks up, then tax revenue increases while gov't spending falls because the private sector starts to take over activities that the public sector has had to do. Hence, the debt shrinks

The debt isn't a big deal since it's owned by the Japanese. So when the govt pays back its debt, the money just flows back into the economy, via institutions or individuals. Wherever there's a debt, there's a surplus. And that surplus is in Japan. No worries, mate.

0 ( +3 / -3 )

@JeffLee

"Once GDP picks up" / "gov't spending falls because the private sector starts to take over activities that the public sector has had to do"

Care to explain these two?

1 ( +2 / -1 )

Ahhhh...so that's what wishful thinking looks like!

0 ( +1 / -1 )

Care to explain these two?

The private sector needs less stimulus from the government when growth is strong, as more and more of its business comes from domestic demand, as opposed to public spending.

In the meantime, corporate tax revenues rise because companies are receiving more income and hence have to pay more in taxes.

Ahhhh...so that's what wishful thinking looks like!

Well, that's what Economics 101 looks like. Care to explain why sentiment among businesses, investors and the markets is so high? Wishful thinking?

-4 ( +0 / -4 )

I can see problems ahead, if imports are now 10 to 25% higher but still Cineese etc food stuff is 1/3 the price of Jns grown / made , commodities such as energy rise. Wages are not rising so who is better off?

1 ( +1 / -0 )

@JeffLee Thanks for the response, but I don't see ANY guarantee that GDP will increase in this economy. With the consumption tax and the inflation tax, people will just keep saving=no rise in corporate taxes. IMO

5 ( +6 / -1 )

I might be kinda dense but unless companies/people are out buying & selling stuff, making stuff, doing things etc then all the BS abenomics will like everything the last 20+yrs do didley squat!

I dont see ANY upside for the people of Japan, but then again the powers that be have never given a rates about the locals no have they!

0 ( +0 / -0 )

@FizzBit Nope, no guarantees. The consumption tax hike was indeed a bad decision: goes against the principles behind Abenomics, to stimulate demand.

0 ( +1 / -1 )

I pretty much doubt that Japan will be able to pay off all the debts reaching 240% of GDP, even if the economy picks up and the tax revenues start flowing in, Jeff Lee, partly because Japan's economic growth will NEVER go beyond 4% max, beyond which inflation will probably start kicking. There'll be always a huge gap between what Japan borrows and pays back.

Japan is relatively safe, because it's sitting on a huge amount of savings made over the decades. It could pay the debts by sweeping on them, if it had to.

OK then, should Japan forget about balancing the book and living happy on its own debts? I guess you'd say yes, Jeff, because It could, but that's just abnormal.

-1 ( +1 / -2 )

I pretty much doubt that Japan will be able to pay off all the debts reaching 240% of GDP

Well, here's a question for you: Who does Japan actually pay when it pays off its debts?

-1 ( +0 / -1 )

Easy: Japan borrows more to pay back. Japan's national budget is around 80 trillion yen, 30 trillion yen of which is financed by debts. Out of 30 trillion yen, the gov pays back 20 trillion yen. but 10 trillion yen of which is used to pay for interests, so Japan borrows 30 trillion yen just to pay back 20 trillion yen every year. Isn't this abnormal, Jeff? No?

Investors still buy Japanese bonds, just because they could be easily paid back if the gov taxed the savings that have reached 1,400 trillion yen. This is why Japanese bonds haven't become junk yet. But how long? The answer is clear: until the debts reach 1,400 trillion yen. Then what could the gov do? Devalue the debts by inflating the economy away. That would be a great way to destroy the national credibility.

-1 ( +0 / -1 )

@Hiroicci You still didn't answer my question, but here it is: Japan pays itself and its major institutions, like banks and insurance companies. The BOJ plans to buy more bonds, so much of those payments...will go back to the gov't! Other big customers are the social security and pension funds, so the public ends up with the money anyway.

There's no point in looking only at the debt: you must also look at the surplus. Wherever there's a debt, there's an equal surplus. Anyway, it's not real money. It's electronic blips that get credited from one institution's account to another. Japan can sustain this form of public debt, while Greece and others can't. So Japan should take advantage of it to boost its GDP growth.

As for bonds, demand remains strong even at extremely low yields. That is an indication of the inherent soundness and faith in Japan's public finances, and in no way is it an omen of doom.

-3 ( +0 / -3 )

let's see that soon....

0 ( +0 / -0 )

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