Kataoka, the Turbo Kuroda for the Bank of Japan that wants to buy more debt

The BoJ ,. Japan's central bank, with current Governor Kuroda and his predecessors, has been doing 30-year QE, has held negative rates for nearly a decade, has bought more than 100% of the country's GDP in bonds, and is actively supporting the stock market by buying billions in ETFs and REITs, overcoming some crises, but not solving the stagnation. Now Goushi Kataoka, a board member of the BOJ who is showing himself as the “Turbo-Kuroda ” and perhaps aspires to become the next head of the Japanese central bank, wants to do even more!

Speaking at a briefing on Thursday Kataoka, who joined the BOJ in 2017, said the coronavirus pandemic could weigh on the economy longer than initially anticipated, warning of greater risks related to the central bank's forecast of a moderate recovery driven by exports. Kataoka also stressed the BOJ's willingness to increase stimulus if necessary, strengthening market expectations, but making an even more expansionary policy lagging behind other countries.

" Given recent national and global economic developments, the need for bolder steps increases ," Kataoka said.

In a speech, Kataoka said Japan's economic outlook is tied to uncertainty about domestic consumption which remains in a "severe state" due to the limits of the state of emergency to combat the pandemic. " Risks to consumption are increasing, " with a spike in Delta variant cases forcing Japan to keep the brakes on economic activity, he said. " There is a good chance that the impact of the pandemic may last longer than expected ."

Emphasizing the likelihood that Japan may soon see further monetary easing, Fumio Kishida – who is challenging Prime Minister Yoshihide Suga in the leadership of the ruling Liberal Party – said Japan must not "lag behind" other countries in supporting their economies with expansive fiscal and monetary policies. After all, which politician misses the opportunity to spend money without asking taxpayers for it? We are not in the Italy of the super euro….

An advocate of aggressive monetary easing, Kataoka has been a consistent and unique dissident against the BOJ's decision to keep its interest rate targets unchanged, saying the bank needs to improve its credibility by showing a stronger commitment to achieve its inflation target of 2%. This means a policy of even more QE, even more interventions on the stock exchange and even more negative rates.

" It is desirable to cut negative interest rates further and lower long-term rates through bond purchases ," Kataoka told reporters Thursday, adding that the bank will be watching climate change issues as it strives to achieve its price target. As a reminder, "climate change" in addition to "covid" have become central bankers' two scapegoats, giving them the green light to do whatever they want to increase asset purchases in the name of higher inflation, even when inflation is already skyrocketing.

" Personally, I believe the BOJ needs to reinforce monetary easing " as inflation will stay off the bank's 2% target for years even if the economy does recover, he said.

His calls for bolder monetary easing measures did not get the support of the rest of the board at the political meetings of the BOJ.

Under a policy called yield curve control, the BOJ drives short-term interest rates to -0.1% and 10-year bond yields around 0% through massive asset purchases. Recently, however, purchases of securities on the market have slowed down, also because the raw material to buy is starting to lack. With Kataoka at the helm of the BoJ we would have an acceleration of QE, at any cost.

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The article Kataoka, the Turbo Kuroda for the Bank of Japan that wants to buy more debt comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/kataoka-il-turbo-kuroda-per-la-bank-of-japan-che-vuole-comprare-piu-debito/ on Fri, 03 Sep 2021 11:01:04 +0000.