• Former Fed chairman Bernanke: despite improvement in Japan's economy, there is still a strong case for Bank of Japan to continue with 2 pct inflation target

Noticias del mercado

24 mayo 2017

Former Fed chairman Bernanke: despite improvement in Japan's economy, there is still a strong case for Bank of Japan to continue with 2 pct inflation target

  • I see BoJ's inflation overshoot commitment and YCC as constructive developments

  • Transmission mechanisms for BoJ have approached their limit

  • BoJ will likely to be able to control jgb yields with smaller volumes of purchases

  • BoJ policy, combined with fiscal stimulus, could help inflation reach 2 pct

  • Cannot rule out possibility BoJ will have to do more

  • One option is for govt to commit to fiscal spending and BoJ to commit to keeping debt/gdp ratio the same

  • BoJ could allow overshoot of inflation to offset rise in debt/gdp ratio

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