BOJ's Kuroda keeps his options open

Kuroda spoke to reporters at the G20, just a few days ahead of the July 29 Bank of Japan decision.

  • BOJ will add stimulus if needed
  • Japan is in a gradual recovery phase
  • Japan's virtuous economic cycle is continuing
  • Direct underwriting of debt banned in developed world

Meanwhile, a separate official said G20 talks with the US's Lew didn't discuss FX much.

The different definitions of helicopter money was one of the things I highlighted.

What is it?

  1. Dropping money from a helicopter
  2. Depositing money into citizen's accounts
  3. Monetizing debt
  4. Pledging to maintain/increase QE holdings for 100+ years and issuing the govt zero-coupon bonds

The last one, to me, is the same thing because it gives the government a huge amount of money to spend that will never be paid back. But there's no strict definition of helicopter money.

Last week, USD/JPY took a spill in Europe after an interview with Kuroda ruled out helicopter money. The 120 pips fall bounced after it was revealed the comments were recorded more than a month ago.