- Desireable for fx moves to reflect economic fundamentals
- China’s economy experiencing somewhat prolonged slowdown
- Global economy faces various uncertainties including timing of recovery
- Failure to do anything to fix finances will lead to rise in Japan bond yields
- Rise in overseas bond yields could trigger rise in Japan long term rates
- BOJ will not buy govt bonds for purpose of monetising public debt
- BOJ buying foreign bonds would be tantamount to fx intervention, which is govt’s role under current law
- Japan economy to resume recovery but key is whether overseas growth will pick up while domestic demand remains firm
Reuters reporting.
USD/JPY comatose at 78.42.
