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Japanese firms see no BOJ tightening until 2019 or beyond 2020: poll

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By Tetsushi Kajimoto

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Governor Haruhiko Kuroda ... and his two new deputies are set to begin their terms, aiming to spur economic growth and drive inflation to the central bank's so-far elusive target of 2 percent.

Central bankers have no power to spur economic growth. Economic growth is people producing more stuff than before. Monetary ease doesn't achieve that.

The BOJ has reduced the amount of government bonds it buys under its super-easy policy, in what traders call 'stealth tapering'.

It's not a true "taper", as they have simply bought so much of government debt that they now can only buy as much as is newly issued - they hit the limit. This is the 35-40 trillion of new debt issuance each year, down from their original (unsustainable) target of 80 trillion. 

And whatever the amount of purchases, the main effect was covert financing of the government's deficit spending - not higher economic growth nor the (unwanted) goal of 2% annual reduction in consumer purchasing power ("inflation").

"... This shows how companies are unconvinced about sustainability of the economy's momentum," said Masaki Kuwahara

That's probably right. I believe companies (like me) want to see true economic reforms to boost growth potential, not government deficit financing.

"They want the BOJ to go slow in tightening policy or even hope for further easing if necessary."

That much is probably just supposition. It's a poll about what they expect the BOJ to do, not what they want it to do.

some 63 percent of respondents say fiscal spending would be needed to offset any potential economic damage from the planned tax hike. 

Oh gawd. If you are going to talk yourself into indebting yourself further, there is little point to hiking the tax rate in the first place. There will be a consumption boom before the consumption tax rate hike and a bust after it. That's the way it is in Japan. Take the good with the bad, not just focus on the bad.

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