In Japan internal and external economic concerns, including the ongoing diplomatic breakdown with neighbouring China, has meant that the pressure on the nation’s central bank to increase fiscal stimulus is building.
The Japanese government is urging bolder and more immediate action and the Economics Minister Seiji Maehara announced his intention of attending next week’s rate review, as long as doing so didn’t prove a conflict of interests. He told reporters ‘I hope to continue calling on the BOJ to pursue powerful monetary easing to achieve at an early date its 1 per cent inflation target.’
According to reliable sources, the October 30th meeting could see the Bank of Japan buckling under the weight of demands and expanding its monetary easing methods.
Although Finance Minister Koriki Jojima rebuffed media claims that the government had asked the Bank of Japan to trigger growth by increasing asset purchases by 20 trillion yen he did comment that he expects the relationship between the government and central bank to be a close one.
Jojima also asserted that in these current financial times taking bold steps is a necessity. He said: ‘There is increasing downward pressure on Japan’s economy. It is urgent that we take measures to ensure an early escape from deflation and to ensure economic growth’.
During its October 30th review the Bank of Japan is now largely expected to slash its predictions for growth and drive back the timing for achieving its target of 1 per cent inflation.
As of 15:00 pm
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