{"id":20351,"date":"2016-05-02T05:15:25","date_gmt":"2016-05-02T10:15:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20351"},"modified":"2016-05-02T05:15:25","modified_gmt":"2016-05-02T10:15:25","slug":"bank-of-japan-the-limits-of-monetary-tinkering","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20351","title":{"rendered":"Bank of Japan: The Limits of Monetary Tinkering"},"content":{"rendered":"<div class=\"art-postmetadataheader\">\n<h3 class=\"art-postheader\"><a title=\"Permanent Link to Bank of Japan: The Limits of Monetary Tinkering\" href=\"http:\/\/www.acting-man.com\/?p=44613\" rel=\"bookmark\">Bank of Japan: The Limits of Monetary Tinkering\u00a0<\/a><\/h3>\n<\/div>\n<div class=\"art-postheadericons art-metadata-icons\"><strong>Damned If You Do\u2026<\/strong><\/div>\n<div class=\"art-postcontent\">\n<p>After waking up on Thursday, we quickly glanced at the overnight market action in Asia and noticed that the Nikkei had tanked rather noticeably. Our first thought upon seeing this was \u201cmust be the yen\u201d \u2013 and so it was:<\/p>\n<p><a href=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/1-Yen-June-daily.png\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-44614\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/1-Yen-June-daily.png\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" srcset=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/1-Yen-June-daily.png 900x, http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/1-Yen-June-daily-300x204.png 300x, http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/1-Yen-June-daily-768x522.png 768x\" alt=\"1-Yen, June, daily\" width=\"640\" height=\"435\" \/><\/a>June yen futures, daily \u2013 taking off again \u2013 click to enlarge.<\/p>\n<p>Given the BoJ\u2019s bizarre plan to push consumer price inflation to a 2% annualized rate within\u00a0<em>[enter movable goal post here]<\/em>\u00a0years, Mr. Kuroda cannot be overly happy about that. In fact, lately it seemingly doesn\u2019t matter\u00a0<em>what<\/em>\u00a0he decides to do or not to do \u2013 the yen is going up anyway.<\/p>\n<p>Last Thursday he reportedly \u201cdisappointed\u201d markets by not expanding the BoJ\u2019s madcap asset purchase program even further. We are not quite sure what people believe could\u00a0<em>possibly<\/em>\u00a0be achieved by making the parabola shown below even more parabolic.<\/p>\n<p><a href=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/2-BoJ-assets.png\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-44615\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/2-BoJ-assets-1024x649.png\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" srcset=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/2-BoJ-assets-1024x649.png 1024x, http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/2-BoJ-assets-300x190.png 300x, http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/2-BoJ-assets-768x486.png 768x, http:\/\/www.acting-man.com\/blog\/media\/2016\/05\/2-BoJ-assets.png 1159x\" alt=\"2-BoJ assets\" width=\"640\" height=\"405\" \/><\/a>Assets held by the BoJ \u2013 Mr. Kuroda\u2019s \u201cQQE\u201d (\u201cquantitative and qualitative easing\u201d) was started in April of 2012. The program has certainly impoverished Japan\u2019s citizens, who have seen their real incomes plummet. Lately it has however abjectly failed to achieve its stated goal, which is actually a blessing in disguise\u2026 \u2013 click to enlarge.<\/p>\n<p>As far as the yen is concerned, we should point out that the trade-weighted real exchange rate of the yen at one point last year had declined to levels last seen in 1973. Combined with the recent strengthening of its technical condition, there is thus actually a good reason for the market to bid the yen up.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Bank of Japan: The Limits of Monetary Tinkering\u00a0 Damned If You Do\u2026 After waking up on Thursday, we quickly glanced at the overnight market action in Asia and noticed that the Nikkei had tanked rather noticeably. Our first thought upon seeing this was \u201cmust be the yen\u201d \u2013 and so it was: June yen futures, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,57,85,534,6170],"class_list":["post-20351","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bank-of-japan","tag-boj","tag-monetary-policy","tag-pater-tenebrarum"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20351"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20351\/revisions"}],"predecessor-version":[{"id":20352,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20351\/revisions\/20352"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}