Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Thursday, March 09, 2006

D Day is Here

Well, not quite, since they aren't actually thinking of raising interest rates anytime soon, but...... ultra loose monetary policy is over (for the time being). Now we get to see what happens next:

The Bank of Japan on Thursday asserted its independence by ending an unorthodox ultra-loose monetary policy and shifting to a policy of targeting the overnight call rate.

The bank said it would take “a few months” to bring massive levels of liquidity back down to levels consistent with keeping overnight rates at zero.

The shift ends five years of quantitative easing brought in to save the economy from falling into a deflationary spiral and to help prop up the bad debt-burdened financial system.

Ending the framework is a declaration that the economy has returned to normal and that, in the bank’s opinion, there is virtually no danger of slipping back into deflation