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17 Dec 2013
Flash: Risk for Japan's economy - NAB
FXstreet.com (Bali) - According to Tony Kelly, Economist at NAB, there are risks that a spike in Japanese bond rates may depress the economy.
Key Quotes
"Abenomics has achieved a lot in its first year with strong economic growth and inflation, and inflationary expectations, heading in the direction needed to end Japan’s long deflation."
"However, despite some positive signs, business investment is yet to ramp up and inflation expectations need to move higher and be reflected in everyday decision making; one crucial test of this will be in wage setting."
"Additional action will need to be taken to keep momentum going. Another fiscal package has recently been announced but the BoJ is also likely to step up its monetary policy and further structural reforms will be needed."
"A risk is that the easy option of fiscal stimulus keeps getting trotted out instead of growth reforms, and given Japan’s large public debt and no long-term plan for dealing with it, that leads to a spike in bond rates which depresses the economy."
Key Quotes
"Abenomics has achieved a lot in its first year with strong economic growth and inflation, and inflationary expectations, heading in the direction needed to end Japan’s long deflation."
"However, despite some positive signs, business investment is yet to ramp up and inflation expectations need to move higher and be reflected in everyday decision making; one crucial test of this will be in wage setting."
"Additional action will need to be taken to keep momentum going. Another fiscal package has recently been announced but the BoJ is also likely to step up its monetary policy and further structural reforms will be needed."
"A risk is that the easy option of fiscal stimulus keeps getting trotted out instead of growth reforms, and given Japan’s large public debt and no long-term plan for dealing with it, that leads to a spike in bond rates which depresses the economy."