The Bank of Japan will aim to double the monetary base over two years through the aggressive purchase of long-term bonds, in a dramatic shift aimed at ridding Japan of the deflation that has dogged the country for almost two decades.
Haruhiko Kuroda on Thursday announced his arrival as central bank governor with a new phase of monetary easing; a move that comes after Prime Minister Shinzo Abe told the bank to target a 2 per cent rate of inflation.
“Quem deus vult perdere, dementat prius”, is an ancient proverb often wrongly attributed to Euripides, which says: “Whom God wishes to destroy, he first makes mad”. It evidently applies in spades to the new leadership of the Bank of Japan. What is so astonishing to us is that this obvious conclusion is not shared by anyone in the so-called 'mainstream'. In short, it seems the Gods have made a whole bunch of people mad.
Hope the good sense prevails and they do not go all out printing the money and lead to a deeper crisis as they are presently in shit but with this approach they will remain in shit only but the depth will vary.
Effect of Govt of Japan Policy
The yen slid to a 3-1/2 year low against the dollar on Friday, after suffering its biggest one-day tumble since late 2008 on Thursday, on the back of the BOJ’s radical campaign to attack deflation.
Which Indian Company Benefits the most with Yen Devaluation?
We see Maruti Suzuki to become the biggest beneficiary by virtue of a weaker yen currency. Now because of the devaluation Maruti margins would improve as its import costs will reduce courtesy Bank of Japan unleashing unprecedented monetary expansion.