Japan
Stanley Fischer analyses the factors behind low real interest rates
The economist emphasises government policy uncertainty in the US regarding health care, regulation, taxes and trade, as well as higher savings and weak investment
IMF gloom on US and UK balanced by brighter spots elsewhere
IMF raises projections for China, Japan and eurozone as the UK and US falter; maintains global growth forecasts at 3.5% in 2017
Bank of Japan cuts inflation forecast as policy remains on hold
The BoJ cuts its forecast for prices as it struggles to hit its inflation target; keeps policy steady
The BoJ’s exit policy and balance sheet risks
The Bank of Japan will need to follow a meticulous sequencing of events as its ‘normalises’ monetary policy, making current concerns about negative equity appear premature
BoJ ups asset purchases to curb bond market pressure
The Bank of Japan has increased the size of JGB purchase operation and announced unlimited purchases of 10-year JGBs at a fixed rate of 0.11%
Survey data can help with modelling expectations – BoJ paper
Discussion paper outlines method of incorporating survey data as a proxy for expectations, with “promising” results for inflation modelling in the US and Japan
BoJ told to improve communication on potential exit from stimulus
Speculation is growing over the timing and method of the exit from the stimulus programme, creating a new communication challenge for the BoJ
BoJ’s Iwata says expectations likely to shift as inflation returns
Deputy governor cites Milton Friedman in arguing that people will become more forward-looking when their wages are eroded by inflation
Bank of Japan strikes upbeat tone as it keeps policy on hold
The Bank of Japan decided to leave policy settings unchanged at its June meeting, but sounded more upbeat on the outlook
Term premiums matter for inflation – BoJ paper
Term premiums domestically and abroad appear to affect inflation via the exchange rate channel, authors find
Inflation overshoot should affect adaptive part of expectations, says Kuroda
Bank of Japan governor says there is still a long way to go until the price stability target is achieved
BoJ’s Sakurai defends aggressive monetary easing
A member of the policy board says yield-curve control allows flexibility for the central bank to implement monetary easing
BoJ's balance sheet surpasses that of the Fed
BoJ's balance sheet exceeds ¥500 trillion, a fraction larger than that of the Federal Reserve in absolute terms, and much larger as a percentage of GDP
Bernanke urges BoJ to keep up its easing efforts
Former Fed chair recommends the central bank continue its aggressive easing, though he concedes “bad luck” could yet cause it to fail
Tackling the ‘human agency’ problem
Central banks are readying their communication strategies to mitigate a populist backlash against their post-crisis policies
Kuroda cautions banks about keeping in step with fintech innovation
Bank’s business models could come under threat if institutions are unwilling to embrace fintech; regulatory sandboxes offer safe space to embrace it, says BoJ governor
Bank of Italy paper finds no evidence of asset over-valuation
Researchers look at data from eurozone, Japan and US from 1980 to 2017
The BoJ’s risky yield curve control experiment
The Bank of Japan’s experiment with yield curve control could work if appropriate targets and communication strategies were applied. But its current policy objectives are muddled
BoJ should provide ‘more realistic’ projections – former policy board member
Claims constant overestimation of inflation expectations undermines credibility
BoJ’s Nakaso says digital currencies would allow ‘wider access’ to payments
Replacing banknotes with digital currencies would be “extreme”, deputy governor says, but would allow “wider access” to central bank payment infrastructure
BoJ board nominations add to dovish slant
Japan’s government has nominated two economists seen as likely to support further easing, in the place of two frequent dissenters
‘Urgent’ action needed to boost bank profits – BoJ report
Financial system report notes bank profit margins have been squeezed, but says sufficient capital is supporting lending for the time being
BoJ paper sketches ‘vicious circle’ behind productivity traps
“Lacklustre” economic reforms and firms’ unwillingness to innovate may create a “negatively reinforcing” loop, the authors warn
BoJ builds on BIS banking statistics
Researchers break down the statistics further, shedding new light on patterns of cross-border banking