23 Mar 2014
Hamada calls for BoJ to stand ready for further easing
FXStreet (Bali) - Close adviser to Japanese Primer Minister Abe, was cited over the weekend in a Financial Times article, saying that the Bank of Japan should be determined to act quick with further stimulus if the sales tax hike proves to troublesome on consumer spending.
Yale University professor Koichi Hamada (a proponent of easing), was quoted by the Financial Times, saying that the BoJ should take action "within one or two months” of next week’s increase in consumption tax, if data were to indicate that consumers were struggling to cope with the fiscal squeeze.
It will be of utmost importance, therefore, to follow very closely all comments from BoJ governor Haruhiko Kuroda, who may be forced to implement further easing programs if the sales tax is too much of a burden for consumers.
“If statistics such as spending data show weakness after the tax increase, then the BoJ should act quickly to implement more powerful monetary policy,” said Prof Hamada.
Hamada added: “I always think stronger medicine has stronger side-effects, so the BoJ, like all central banks, should try and calculate the risks. But even if bigger buying of bonds or other assets disturbs or interferes in private activities, the central bank should do it, if it really has to.”
Yale University professor Koichi Hamada (a proponent of easing), was quoted by the Financial Times, saying that the BoJ should take action "within one or two months” of next week’s increase in consumption tax, if data were to indicate that consumers were struggling to cope with the fiscal squeeze.
It will be of utmost importance, therefore, to follow very closely all comments from BoJ governor Haruhiko Kuroda, who may be forced to implement further easing programs if the sales tax is too much of a burden for consumers.
“If statistics such as spending data show weakness after the tax increase, then the BoJ should act quickly to implement more powerful monetary policy,” said Prof Hamada.
Hamada added: “I always think stronger medicine has stronger side-effects, so the BoJ, like all central banks, should try and calculate the risks. But even if bigger buying of bonds or other assets disturbs or interferes in private activities, the central bank should do it, if it really has to.”