Japan Jumps on the QE Wagon

by Marilou Long on September 19, 2012

in Credit Crisis,currencies,Foreign Markets,Geopolitical

Markets in Asia rallied yesterday when Japan announced that it would expand its asset purchase program by $126 billion.  The follows the Federal Reserve”s announcement last week of QE3.   From the linked Bloomberg story:

Japanese stocks jumped and the yen fell after the decision to ease policy, which was forecast by only five of 21 analysts surveyed by Bloomberg News. With today’s move, the BOJ joins counterparts from the Federal Reserve to the European Central Bank in acting against persistent risks to growth, five years after the U.S. mortgage meltdown derailed the global economy.

“Whether central banks intend it or not, there is a competition for loosening monetary policy around the world,”said Izuru Kato, chief market economist in Tokyo at Totan Research Co. and one of the analysts who forecast easing. Shirakawa doesn’t want to be seen as “reluctant to compete in the race” because of the risk of yen gains that will hurt the economy, Kato said.

 

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