BoJ Kuroda: No magic wand for central banks - Rabobank

In these reverse FX Wars, where everyone suddenly seems keen to raise rates and/or push their currencies through the roof, it was –amazingly- the BOJ’s Kuroda who was the voice of reason yesterday; he stressed that there is “no magic wand” for central banks to suddenly whisk us out of our malaise, points out Michael Every, Senior Asia-Pacific Strategist at Rabobank.

Key Quotes

“And if any bank should know that, it’s the BOJ: they have been in the New Normal for so long it is their Old Normal. And they understand that unless wages growth rises sustainably –and even in regulated/social Europe that is not happening- every attempt to hike rates is only going to end painfully. Just ask New Zealand, who bruised themselves throwing their shoulder against the New Normal a few years ago – and they have a far stronger economy than most.”