``It's reaching the point where the central bank must take rate action,'' says Hiromichi Shirakawa, a former Bank of Japan official and now chief economist at Credit Suisse Group in Tokyo. ``Capital is flowing out of Japan too quickly, making the economy vulnerable to currency fluctuations.''Driving the flows are individual Japanese, of whom "a growing number... joining fund managers in shifting money out of Japan"... ""The bank is worried that when the carry trades unwind, households will get burned,'' says Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. "..
The Bloomberg post mentions Japan's demographic situation, quoting Dai-ichi Life Research Institute: "A wave of retirees is likely to increase the flow even more. The first of Japan's 7 million baby boomers reach the retirement age of 60 this year, triggering lump-sum payments that will total 50 trillion yen for those born between 1947 and 1949"... the expectation is that those lump-sum payouts will be invested overseas...
It appears that the Japanese finance authorities are approaching a point where they will have to make a decision on their monetary policy that will have a major impact on Japan's economic situation for an extended period of time...
