Bank of Japan may go nuclear in 2013

View Comments

The Bank of Japan is putting all options on the table as pressure from the government mounts to halt deflation and the strong yen, according to a report from Reuters.

Members of the BOJ’s elite monetary affairs department have been drawing up plans for a bolder set of policy options since late last year, people with knowledge of those discussions say.

They say the BOJ believes it must do something dramatic in order to keep the government from rewriting its charter. They are talking about a massive bond buy or purchasing foreign bonds.

Some inside this circle advocate a shock to the system with a “big-bang” increase in government bond buying to the tune of 100 trillion yen ($1.22 trillion) in one go, instead of the much-criticized baby-step approach of incremental increases, people familiar with the discussions say.

Overnight economic data from Japan was much stronger than expected and that diminishes the urgency to act but the tone of the story is desperation.

The results mean 2013 could be the year of yen weakness but radical BOJ action could also light the fuse of the next crisis.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.

2012-11-30T14:24:03+0000

All|Americas|Central Banks|Regions

BOJ|Japan|QE

Adam Button

4 Comments

  1. weak data from US are going to pull down GBPJPY? it should went up !

  2. Month end flows are dominating fundamentals today.

  3. Jamie, So can we have hopes for return in the next week?

  4. Thanks Jamie. I got it.

Top

© Copyright 2014 ForexLive™  |  Advertise With Us  |  Login To Comment  |  Sitemap

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.