Kuroda says he has no desire to be reappointed BOJ governor

has no desire to be reappointed BOJ governor

And we are not interested to have weak yen in our pocket for another year to come.

"In April, it will be 10 years since I became governor. Personally, I have absolutely no desire to get reappointed," Kuroda told the Diet.

Oh no! Who else will maintain the monetary easing QE, that is a basic income for wealthy asset holders!

Just the next LDP appointee.

The yen shot up overnight on a cool inflation report in the US. This would seem to support Kuroda-san's assertion that the current situation of increased inflation and a weak yen is temporary.

Once you have overseen, managed the collapse of the populations incomes. Job done. Time to move on. A position with the Nuclear safety standards next, get those regulations to 2%.

The headline and photo are a perfect match

Can’t imagine next puppet will be much different without a change of thinking by the LDP

Good riddance … tired of ruining Japan’s economy?

Oh no! Who else will maintain the monetary easing QE, that is a basic income for wealthy asset holders!

Sigh. Only someone who has no idea what a deflationary death spiral could look like could write something like that. Until this year Japan has teetered on the edge of that precipice for the better part of three decades. The US and the rest of the developed world were either close to the edge or slightly over it into deflation since 2009.

In a deflation, prices and wages both fall, but outstanding loan balances do not fall. People see prices falling and decide to delay purchases thinking they can save money by waiting for prices to fall further. That leads to a reduction in business and an acceleration of the deflationary spiral. At some point wages and revenues fall to a point where they are not sufficient to make debt payments. When that happens you have mass personal and business bankruptcy, mass unemployment and human suffering rivaled only by war.

That is why central bankers pump money into an economy when wage and price growth show signs of edging into negative territory. No sane policymaker wants to take the risk of letting a deflationary spiral fully develop.

And obtw, this current bout of inflation is temporary, caused by production and supply chain disruptions due to a global pandemic and a major war, both of which have greatly disrupted global resources and global supply chains. That disruption is temporary. The underlying causes of the previous deflationary pressures have not disappeared and will return with a vengeance in a couple of years. Accumulation of wealth has accelerated and the wealthy do not spend the money pumped into the economy to stave off deflation, as one can see if they look at the decades long decline in the velocity of money, the measure of how often a dollar, euro or yen changes hands.

Sigh. Only someone who has no idea what a deflationary death spiral could look like could write something like that.

Face palm.

Only an internet economist could think a political appointee invested in shilling for failed economic policies

would know more than an actual billionaire appalled by economic policies that benefit his class too greatly.

To the detriment of the overall economy.

https://twitter.com/mcuban/status/1318929147348090882

Can’t imagine next puppet will be much different without a change of thinking by the LDP

If you would take the time and effort to study macroeconomics you would understand how limited Japan's options are. Japan's demographic trends make it very difficult to grow their economy in the manner of the 1960s and 1970s, and the discipline of economics does not have easy answers for Japan's problems. Pretty much all of economics is predicated on increasing populations driving the rest of the dynamics of growth. I am not aware of a good economic model for growth in the face of a declining and rapidly aging population. It is not for a lack of studying the problem but there is probably a Nobel Prize for whomever or what team comes up with a viable model of growth and prosperity with a declining population. But take heart, the situation is far worse for South Korea, China and Singapore.

Don’t know if anyone else would have done anything different. Japan has been between a rock and a hard place for a long time.

This would seem to support Kuroda-san's assertion that the current situation of increased inflation and a weak yen is temporary.

Please share your definition of "temporary?" The overall Japanese economy has been in a doldrum for at least a generation already.

If you consider a "generation" to be temporary, we all are in serious trouble!

And we are not interested to have weak yen in our pocket for another year to come.

exactly.

Can’t imagine next puppet will be much different without a change of thinking by the LDP

Exactly. Or maybe a change of gov all together.

Good riddance … tired of ruining Japan’s economy?

He's done all the damage he wanted to do.

Don’t know if anyone else would have done anything different. Japan has been between a rock and a hard place for a long time.

It has been there thanks to the LDP mismanagement. Consider that Abe, a few of his predecessors, and now Kishida too, have been using bubble era ideas to manage the economy. It worked then, so to them it should work now too. Bury everything in public spending and we will "stimulus" our way out of these problems.

The world has passed Japan by, and those outdated methods of managing the economy are killing the future of Japan.

Japan SHOULD have tightened the belt decades ago, during the blood bath of "ristora" following the bubble bursting. But no one had the cojones to do it, as they all were worried about their own jobs.

Politicians are great with ideas, particularly when they are using public/tax money, but few if any could or would be successful in the "real" world, because they dont know how to manage it.

@dagon, I have no access to twitter, fakebook or any other of those kinds of platforms. Got a better link?

@Yubaru well said .

Please share your definition of "temporary?" The overall Japanese economy has been in a doldrum for at least a generation already.

If you consider a "generation" to be temporary, we all are in serious trouble!

As I explained above, the increased inflation is temporary due to pandemic and war driven disruptions in manufacturing and transportation. Those will work themselves out rapidly. In fact shipping rates are falling so fast that ocean carriers are starting to lay up ships for lack of cargos to haul. Container rates have fallen almost to pre-pandemic levels. Longer term the trends are deflationary.

Yubaru well said 

I'll second that. One hell of a great post, Y!

Desert TortoiseToday  08:09 am JST

As I explained above, the increased inflation is temporary due to pandemic and war driven disruptions in manufacturing and transportation. 

The inflation is not due to the pandemic but due to the failed efforts of goverments around the world: useless lockdowns followed by giving away free money to people who cannot spend it. Already in 2020 it was warned by ”experts” that it will create runaway inflation.

Also, contrary to popular text books about deflation, deflation is the best friend of the population. 30 years of no price increases is heaven. With inflation regular worker always loses as wages NEVER keep up.

Thanks, finally he is retiring.

And we are not interested to have weak yen in our pocket for another year to come.

Japanese prefer an inflation at 3% than 20% as is in the west.

Can’t imagine next puppet will be much different without a change of thinking by the LDP

The BOJ is an Independent body

Good riddance … tired of ruining Japan’s economy?

With record profits, low inflation, and low unemployment?

Dumb, dumber and dumbest. is the best to describe the quoted statements.

It has been there thanks to the LDP mismanagement.

Yeah right, and that is why Japan is much better shape that those in the West. In the west people are using their credit cards to buy milk and there desperation in the air. The cites in the west are full of crime and homeless people and westerners such as the poster above know it. That is why they are still in Japan, because they know how screwed up things are in the west.

Nearly Half of UK Families Are Left With Less Than £3 a Week

https://www.bloomberg.com/news/articles/2022-10-27/cost-of-living-crisis-inflation-uk-families-have-less-than-3-to-spend-weekly#xj4y7vzkg

3 pounds a week? Wow your doing so great. LOL

Well done Kuroda! You did a great job for Japan.

Oh no! Who else will maintain the monetary easing QE, that is a basic income for wealthy asset holders!

I think you're confusing QE with IR. BoJ balance sheet has been on a tightening cycle since the start of the year. Sure there's a lot of papers still circulating but it is on the decline.

https://tradingeconomics.com/japan/central-bank-balance-sheet

IR/bond yield curve control is prudent, to assure businesses wishing to invest that the BoJ is not going to do anything out of the ordinary. Kuroda, IMHO is a relatively steady hand compared to the feds.

Kuroda says he has no desire to be reappointed BOJ governor

Nobody asked you to continue, fool.

The sooner you're gone, the better.

@cricky

Once you have overseen, managed the collapse of the populations incomes. 

The BOJ’s job isn’t to raise people’s incomes. Its job is to maintain unemployment and price stability. You may as well blame the Police Agency for climate change. Private-sector employers are to blame for low wages, because, guess, what, theyre the ones who actually decide them. Blame them.

As for the BOJ’s remit, unemployment and inflation are pretty damn low in Japan compared to most other countries.

@yubaru

Please share your definition of "temporary?

Another year or two, or after the current global supply crunch eases sufficiently. I grew up in the 70s, where high inflation persisted for over a decade. That was not temporary. You're welcome.

Of course it would mean he would have to take responsibility one day for the terrible mess he created!

this current bout of inflation is temporary, caused by production and supply chain disruptions due to a global pandemic and a major war, both of which have greatly disrupted global resources and global supply chains.

Many economists do not agree about this characterization of inflation and deflation that is tailor made fo central bankers and economists like Kuroda bought and paid to increase the bottom lines of the .01% with their policies.

https://www.cnbc.com/2013/12/18/qe-the-greatest-subsidy-to-the-rich-ever.html

Fumio Kishida has offered few clues on who his preferred candidate could be, or when he could make the decision.

Kishida patting his son's back as Kuroda gives his speech

Doesn want to be around when the absolute mess he has made finally comes home to roost.

Doesn want to be around when the absolute mess he has made finally comes home to roost.

‘From the photo he will long dead or even cognitive of any before realisation of what he did comes home to roost. Hand picked by Shinzo, that’s a tell tail sign of corruption and incompetence.

Kuroda is an independent thinker and he won’t continue because he doesn’t appreciate the dictates from the global entities.

Kuroda is the legacy of Abe era for destroying Japan to satiate the greed of foreign investors.

Wasn't Kuroda the instigator of Abenomics? But what has Abenomics brought about? His desire not to be reappointed the governorship of BOJ may tell something. 

Oh, to anyone who can respond to the following question:

Japan led other countries in the production of semiconductors. Today, though, it lags far behind other countries. In fact, it is prohibited to produce semiconductors itself internally but has to import them from abroad in consonant with a bilateral agreement between the U.S. and Japan. 

Anyone who is versed with what went on in this bilateral negotiation or agreement?

Also, contrary to popular text books about deflation, deflation is the best friend of the population. 30 years of no price increases is heaven. With inflation regular worker always loses as wages NEVER keep up.

Japanese real wages have been declining for the past 30 years so please tell us all how deflation is the population's friend. You have not see a true deflationary death spiral because wise central bankers have so far prevented that from happening. There are reasons unrelated to inflation or deflation why real wages stagnate or decline over time.

The inflation is not due to the pandemic but due to the failed efforts of goverments around the world: useless lockdowns followed by giving away free money to people who cannot spend it.

Money supply data says otherwise. Growth and decline rates of M1 and M2 have not been heavily affected by stimulus programs. You can see very short term growth spikes followed by a resumption of prior trends. What also has not been changed is the slow steady decline in the velocity of money, the measure of how often currencies change hands. That decline reflects the continued transfer of wealth from the many to the few. The reason for that is the lack of competition in major consumer markets. Oligopoly and monopoly reign supreme in too many major markets. Both are able to sell less at a higher price than would be possible in a more competitive market. The higher price paid the monopolist or oligopolist compared to a fully competitive market represents a wealth transfer from consumers to producers. That is why wages are stagnant or declining in real terms, why wealth is accumulating in fewer hands and why the long term trends are removing money from circulation which is deflationary even as central banks eased lending, All the QE is immediately sucked up by business as monopoly rents, a fact reflected in the roughly $4 trillion in unspent cash balances US corporations are sitting on. That much unspent cash is testimony to monopoly or oligopoly market power and dwarfs QE.

He’s highly probable not alone with that no-desire. lol

Please share your definition of "temporary?" The overall Japanese economy has been in a doldrum for at least a generation already.

Here are some leading indicators to mull. Where a year ago ocean shipping lines couldn't find enough ships to move the freight their customers wanted moved and Asian shipyards were booked solid with orders for new ships, those same ocean lines are now laying ships up and making decisions about which ones to scrap. Where two years ago the rate to move a 40 foot container from Shanghai to Long Beach went from a pre-pandemic cost of $2000 to $20,000, today that same container costs about $3,000 to move from Shanghai to LA and the rates continue to fall. West coast ports are reporting significant declines in cargo volumes too. The decline in the prices in good will soon follow.

Relinquishing his post tells us something bad is about to take place in the global monetary systems and bailing now, with the hefty wealth he has managed to pull off, is his course of action.

What makes him think anyone would want him to stay. 10 years of nothing, except incompetence. Picking up tax payers money for the same 10 year period for complete uselessness. Fade away quietly, please

how limited Japan's options are. Japan's demographic trends make it very difficult

Yeah it is not easy.

But printing money and spending that money willy nilly is doing nothing to improve circumstances, only make them worse.

Reforms to unsustainable systems are needed. It is not politically easy. But they are needed.

We need someone older and more outdated to run the bank dammit !!!!

Japanese real wages have been declining for the past 30 years so please tell us all how deflation is the population's friend. …. There are reasons unrelated to inflation or deflation why real wages stagnate or decline over time.

So what point were you trying to make with that paragraph?

“Deflation” in Japan, was basically steady prices generally - 0% inflation. It’s not like Japan had 2% deflation.

Real wages is nominal wages adjusted for inflation. If deflation were occurring nominal wages staying the same would be a real wage increase.

Low inflation is better than 2% inflation. Only crazy spendthrift politicians like inflation because it’s like a tax that they don’t need people to vote for.

That can surely be helped immediately in an eye wink’s time, @Alan

The last decades of monetary policy coupled with fiscal indiscipline have ruined Japans prospects of ever getting back to some form of economic stability.

He likely wants to be long forgotten when the inevitable consequences ensue.

Was it during Japan-U.S. trade talks in 2019 that Japan agreed with the U.S. so that Japan would not be allowed to produce semiconductors and export them to the U.S.?

Guy wants to get out before it completely hits the fan.

 In fact, it is prohibited to produce semiconductors itself internally but has to import them from abroad in consonant with a bilateral agreement between the U.S. and Japan. 

https://www.heritage.org/asia/report/the-us-japan-semiconductor-agreement-keeping-the-managedtrade-agenda

First off, Japan dumped chips on the American market illegally and got nailed for it. However, they are not "prohibited" from producing them domestically.

You are again cherry picking a topic. Please stop.

I don’t blame him. It’s a thankless job. Politicians everywhere love to borrow forever and pass the bill to the future while playing games with the money supply. They’re re-elected by the masses who want a free lunch. That’s what makes for currency decline.

What makes him think anyone would want him to stay. 10 years of nothing, except incompetence. Picking up tax payers money for the same 10 year period for complete uselessness. Fade away quietly, please

The BOJ does not collect or remit tax revenues. They are completely outside of the tax system. A central bank tries to manage money supply growth (or decline) and the employment rate by controlling lending by commercial banks. They do this is a couple of ways. Commercial banks have to keep their reserve funds on deposit with the central bank. If a commercial bank lends more than it has reserves to cover, they have to borrow from the central bank. The central bank sets an interest rate on this borrowing that can incentivize a bank to either lend more (low interest rate) which grows the money supply, or by increasing the interest rate they force banks to lend less money and contract the money supply. This indirectly affects the inflation rate and employment. Central banks can also buy bonds to inject money into an economy or they can sell bonds to take some money out of the economy. No tax revenues or even tax policy involved. This is all done completely outside of the legislative process.

Low inflation is better than 2% inflation. 

2% per year inflation is very much low inflation. A constant low inflation rate is what business and savers want. They want predictability. It permits them to plan for the future and manage their money wisely. It also permits growth because business lending implies growing the money supply. They are inseparable. Every bank loan is effectively new money added to the economy. Without those loans your economy comes to a grinding halt.

"Deflation” in Japan, was basically steady prices generally - 0% inflation. It’s not like Japan had 2% deflation.

Declining asset values in the aftermath of the bursting of the so-called "twin bubbles" in the real estate and stock markets led to actual deflation that persisted all through the 1990s.

https://www.boj.or.jp/en/announcements/press/koen_2003/ko0304d.htm/#i3

https://www.macrotrends.net/countries/JPN/japan/inflation-rate-cpi

You can see Japan's CPI for 2021 was -0.23% and for 2020 was -0.02. That is deflation and it is a big problem for borrowers. You can see all the years Japan's CPI was negative on the macrotrends chart.

This chart shows per capita GDP in Japan from 1960 through 2021. You can see that after constant steady growth from 1960 through 1995, real per capita GDP has stagnated. Some years it grows, other years it shrinks but the last several years are all lower than 1995.

https://www.macrotrends.net/countries/JPN/japan/gdp-per-capita

Here is a chart of Japan personal disposable income for the past 25 years and you can see the trend is negative.

https://tradingeconomics.com/japan/disposable-personal-income

@Tortoise

Are those numbers PPP or inflation adjusted? Because the cost of living in Japan has lately been a fraction of what it was during the bubble. The "stagnation" trend in the chart started when consumer prices started their prolonged decline. Tokyo today is perhaps the world's most affordable global capital.

Are those numbers PPP or inflation adjusted?

Neither. They are nominal calendar year values Btw, on that second link in the menu bar above the chart you can choose to look at 5, 10 and 25 years of data. Click on "25Y". It is interesting to look at all 25 years to see the extent of the downward trend over time.

Here is a chart of the Japanese CPI over time. Again, choose to look at 25 years of data by selecting "25Y" from the menu bar above the chart.

https://tradingeconomics.com/japan/inflation-cpi

I don’t want to be around when they realized how much I screwed up my country. I am taking my money and running.

You can see Japan's CPI for 2021 was -0.23% and for 2020 was -0.02. That is deflation and it is a big problem for borrowers.

Not at all. -0.23 is basically zero, and as a borrower I didn’t feel any problem whatsoever, and my borrowing is on a higher fix rate rate, not a lower variable one.

Compared with now and high inflation of 3% - 50% higher than the dopey 2% inflation target, that was great. I suffer from rising prices, not from steady ones.

The borrowers who would suffer would be those borrowers that aren’t making good use of the money. The government being a prime example.

You can see all the years Japan's CPI was negative on the macrotrends chart.

Averaged out it looks like it was 0% to me.

Another important point with respect to the BOJ is that it’s mandate is price stability and sound economic development, not anything to do with employment specifically.

https://www.boj.or.jp/en/mopo/outline/index.htm/

The word employment doesn’t even appear on that page.

In other countries central banks do have dual mandates relating to prices and employment, but the BOJ does not.

When you have a Central Bank, that's controlled by the Political Party of the current Government of that Country, what else would you expect ?

I sort of feel sorry for him, but his retirement package, as too others of his ilk, makes me sick.

Not at all. -0.23 is basically zero, and as a borrower I didn’t feel any problem whatsoever, and my borrowing is on a higher fix rate rate, not a lower variable one.

No. -0.23 is by definition deflation. Japan has had years long periods where the CPI was continuously below 0 with occasions of the CPI declining by over 2%. Go back and extend that chart out 25 years and see for yourself. The problems manifest when you have 8-10% or greater deflation per year, in other words an uncontrolled deflationary spiral. Your wages and/or business incomes drops constantly but your loan payment does not. In addition the value of what you purchased with that loan is also falling constantly. Assuming you even have enough income as your revenues decline with the CPI to make your payments, at some point when your lender judges the value of your collateral has fallen below the outstanding loan balance, your lender will call your loan. Can you pay it? Or do you declare bankruptcy? Multiply that across an entire economy and you start to see the problem with allowing a deflationary spiral to fully develop.

You so far have not faced that problem because Japan has had wise and innovative central bankers who have so far prevented Japan from falling into a deflationary spiral.