Monetary tightening not suitable at all: BOJ chief Kuroda

So he's just betting that there will be no wage inflation in Japan above 2 percent. Could be true. Unions are very weak in Japan. And a weak yen will support some sectors of the economy.

History repeating itself. Kuroda refuses to pop the bubble he created and continues to devalue the yen while the rest of the world tightens. Playing with fire

The yen has been falling as financial markets price in the prospect of such policy divergence, but Kuroda said yen weakness is "positive" as long as it is not rapid. It will also benefit pandemic-hit service providers in regional areas as Japan is set to reopen its doors to foreign tourists from Friday, he added.

These short, gnomic responses from Kuroda are supposed to be deep pronouncements from on high but just demonstrate that he is a tool of the establishment.

Do the benefits to the service providers of foreign tourists outweigh the harm to the Japanese worker?

I would estimate his calculations must be off.

As always, he knows the highest principle is "The QE must flow" to the financial industry and Japan Inc. and totally bypass the public.

Einstein quote:

« Insanity is doing the same thing over and over again and expecting different results »

Kuroda said yen weakness is "positive" as long as it is not rapid.

Depreciation from 115 to 132 over the last 3 months is not considered rapid by Kuroda san!

Is he waiting for the JPY to turn into the Turkish Lira to say it is rapid…

""What is important for the economy is that companies that have reaped the benefits of yen weakness and seen their profits recover will increase capital spending and raise wages, and there will be a stronger cycle in the economy for more income and spending," he added.""

Agree but if these companies are slow in raising wages or even not raising them at all them you got thousands or even millions basically working for free.

Quite sensible decision. The current 2% inflation is caused by rising prices of imported oil and commodities, not by economic recovery brought on by growing demand as seen in the US and other developed countries. It’s good to know that at least the head of the BOJ is not a madman.

Inflation is not happening in Japan yet. There is no reason Japan to increase interest rate right now. Increasing interest rate is more hazardous than cheaper yen affecting people's life, for example, those who borrowed money to buy their houses. Kuroda's tenure ends next April. New governor replacing him will increase interest rate.

In his speech, Kuroda said the BOJ's failure to attain its 2 percent inflation target after over nine years of monetary easing can be traced to the "zero inflation norm," in which everyone acts in concert to keep prices unchanged.

.......

Kuroda the conspiracy theorist?

Anyway, he is wrong.

Kuroda was hoping for wage push inflation but there isn’t any mechanism for Japanese companies to pay their staff more-wishful thinking there.

And higher prices (Yen weakness) are being forced on the Japanese consumer so it is up to the government to reform taxation to allow basic living to become easier.

Still,I am out of yen assets apart from my house and enjoying the sinking yen mightily!

BOJ has one playbook and they intend to play it until the unthinkable happens and the wages actually start to rise or Japan gets a second burst of the "bubble". But this one won't be like the other.

Besides negative interest rates, everyone in Japan has had 15% of their wealth wiped out this year from the plunging value of the yen. A 15% wipe out of all wealth, staggering.

Oh my lord cut his strings off! Get him a blood transfusion, release him. Find an actual functioning human to make decisions.

in other words….

“In a world where change is rapid and constant, we WILL NOT change and we will do it at a slow and constant pace.”

The zero inflation norm - actual stable prices - is a fundamental building block of a strong economy. Yet the BOJ central planners think that having the value of money of Japan’s savers decrease year by year is a good thing.

The central planners completely misdiagnosed the problem that ails Japan.

This guy will end his term soon. Under his brilliant policy, the economy of Japan is still stagnant. For sure, he will not make any change. Too late to make any changes. Let’s see. 135 is coming

quote: Even though core consumer inflation jumped 2.1% in April from a year earlier, it does not mean the BOJ's 2% inflation target has been achieved.

This guy's soroban is clearly broken. Someone lend him a calculator.

So he thinks all this inflation will vanish soon - the Russians will exit Ukraine, apologise and pay compensation, Putin will voluntarily fly to the Hague to face charges, Russian energy will flow again, China will forget about Covid Zero and turn back to Capitalism with a red twist, and the climate will settle down.

Retail inflation - food and fuel - even in Japan, is way higher than 2% and that is after being artificially suppressed as companies reduce portion sizes and try to absorb costs. None of which is sustainable.

But hey, don't you love an optimistic person! Especially one who brings his favourite sticks to work with him.

Even when that happens its mainly just the big companies at the top that do it whilst the majority mid to small size firms do next to nothing.

That is a great illustration of the limitations of the central planning style approach.

A different type of policy - one that achieves a rising tide that lifts all boats - is required, but it needs a total mindset shift from those in power (or a change in those in power).

One more point to make is that this notion that The BOJ can do what it is doing now, full bore, or tighten, is a false dichotomy.

They should at least be lessening the degree of extra “stimulus” they are providing - that isn’t an actual tightening though. It is just slowing the rate of the loosening.

Another young (77) and dynamic politician from Japan inc.

No wonder that with all these seniors at the government they lack behind the modern world.

BOJ Chief Kuroda is spot on because to have a vibrant economy, cash and credit need to be easily available.

however, the Davos guys and the US are making their moves to digitize the dollar and come up with a global digital currency which is a problem to the rest of us. This will be programmable and can easily be used to control, manipulate, coerce, restrict, etc the buying and selling. They can dictate what you can have and what you can buy. If one is not compliant, you can easily be cancelled out.

Mr. KURODA Haruhiko has a solid grounding in economics.

https://www.boj.or.jp/en/about/organization/policyboard/gv_kuroda.htm/

His CV

So why is Kuroda Haruhiko talking gibberish? Measures of underlying inflation reflect movements observed in consumer prices!

Just visit your local supermarket.

To defend its cap on the benchmark yield, the central bank announced it would buy unlimited amounts of 10-year government bonds at a fixed rate of 0.25 percent every business day.

How close is this to monetarizing Japan debt?

At the same time as salaries for the most venerable are being suppressed.

old crap talk.

The main factor hurting the economy is politics…. Can’t imagine that this guy has been failing for a decade remains leading the BOJ.

In typical Japanese tradition, when faced with adversity just bury your head in the sand and hope it goes away.

…the core consumer price index, excluding volatile fresh food items…

i don’t think food prices will go down again. Can you imagine shrinkflation reversing?

I was just watching the new apple event WWDC and though oh great new products, so I head over to their site thinking of a new MacBook.

Guess what, the preciously same MacBook Air (last years model) has gone up from 115000JPY to 135000jpy. That's a 15% increase people. Off course the new 15%+ prices came to all the NEW products starting prices.

Every single company from US/Europe see these and I am sure are on their way to increase similarly the prices.

So yeah inside Japan we may have not seen yet extreme inflation (and this is only yet) but we have an instant depression of purchase power of at least 15%.

Weakening yen just makes 15%+ inflation to all imported products.

Everyone should push for at least 15% increase in wages. I have zero expectations from most opinion less Japanese people.

Japan's budget is 100 trillion yen while tax income is 60 trillion yen. They fill the gap issueing the national bond and that accumulated 1,200 trillion yen. If they increase the interest rate, they have to pay a lot more for increased interests of the national bonds.

It may be just a coincidence but I’m sure it’s directly related.

last night before I went to bed, I SWEAR the exchange rate was $1 to ¥130.

but after reading this, I looked it up. The rate is now $1 to ¥132!?!??

Did this moron’s comments just weaken the yen, overnight!?!??

I wish some Japanese billionaires would speak up about the reality of these monetary policies of corporate stooges like Kuroda like some American billionaires have spoken the truth:

https://twitter.com/mcuban/status/1318929147348090882?lang=en

It is not like they are hurting for money and this is socialism for the rich.

Any of the Japanese establishment ready to speak truth to power?

He is living fossil this man.

Is his brain even working at half steam?

Blue I do have some qualifications and experience, but not at Kuroda Haruhiko level by any stretch of the imagination.

My accountancy knowledge leads me to believe that BOJ under Kuroda Haruhiko stewardship is not independent from LDP ruling government political interference.

This is concerning. The Governor of the BOJ, in many respects in charge of the worlds 3rd economy must assert his independence.

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Once again...here comes the revolving door enigma.

It will also benefit pandemic-hit service providers in regional areas as Japan is set to reopen its doors to foreign tourists from Friday

If that's what they're banking on as a positive for the cheap yen, we're doomed.

Central bankers around the world all seem to be oblivious as to exactly what they are doing. Just carry on printing and buying their governments debt as if that is anything but disastrous.

"What is important for the economy is that companies that have reaped the benefits of yen weakness and seen their profits recover will increase capital spending and raise wages, and there will be a stronger cycle in the economy for more income and spending," he added.

…

The above comment shows how much Kuroda is out of touch with reality.

Japan is now advancing at a faster pace down that slippery slope!

This guy is an absolute moron but none of these rich elites give a damn for the ordinary people, whose job is just to obey. The yen is now nearly at the 133 level. Thank god that I and everybody I know moved all our money into dollars and swiss francs years ago. We all knew the collapse was coming and now it has begun.

We should all demand our salaries are paid in US Dollars and have nothing to do with this weak pathetic little yen.

The problem with a salary in US dollars is you will soon be in the top income tax bracket, thanks to the plunging value of the yen…

I saw a funny thing on a business news TV show this week - a commentator was talking about “capital flight” by Japanese residents. They were also commenting about how Japanese individual investors now have, I forget the exact numbers but I think it was something like, 10 times as much money invested overseas/in US stock indexes than they do in their own home country market. (With low interest rates and the BOJ itself back stopping Japanese stocks you’d think some fools would still be in the game but no they prefer to be in US stocks in the midst of a tightening cycle - that really says something)

Something needs to be done to encourage them to invest at home in Japan the commentator said - but hey that’s easy - and it’s not just the local investors they need investing, but GLOBAL investors. This is not rocket surgery - the policies that will make Japan attractive again are well understood. But Japan’s leaders don’t have an interest in it.

“Invest in Kishida”, requested Kishida himself the other day in London. What is the clown thinking? Kishida himself doesn’t own any stocks. This moron Kishida and Kuroda need to be ejected asap. The summer elections might be an opportunity for others to come to the rescue here, if the voting populace have half a clue about what is going down (Japan) at the moment.

Perhaps the Yen is being manipulated to force people to (a) buy less, and so (b) emit less, and (c) when they do buy, buy Japanese - a Sony phone rather than an iPhone, the former being a patriotic act, the later, in nationalist terms, the act of a traitor.

Normally the US would complain about such currency manipulation, but as long as Japan plays ball on other policies, it will probably get a free pass.

Given that all countries have switched to the Chinese model for the last two years and dished out tonnes of your grandchildren's tax payments to keep everyone sweet, it's difficult to condemn any single country. Plus the new rules are very much all about controlling your turf and letting others control their turf as they see fit. Politicians are, globally 'all in this together', and are more likely to support each other now, regardless of what they do, their common enemy being their own citizens.