Boj

"The politicians are tied up . . . I don't think they have time to think about [central bank policy], " said the person close to the BoJ.

However, analysts and traders said the main focus remained on a two-day meeting of the policy board of the Bank of Japan that ends today.

Regardless the BOJ seems to have a bit of firepower behind them this time around.

The question of what measures are needed in accordance with this policy is a matter for the BoJ to decide.

There will be calls for remedial action from the Bank of Japan, although it has no low-risk way to ease monetary policy much further.

Mr. Jones urges the BOJ to keep its policy rate close to zero and 'focus on trying to stop deflation. '

Kiyohiko Nishimura, deputy governor of the Bank of Japan, said he feared a "widespread credit crunch" .

Mr Hatoyama's administration, meanwhile, should stop pestering the BoJ about deflation and face up to its own responsibilities.

He urged the BOJ to keep its policy rate close to zero and "focus on trying to stop deflation. "

Traders are understandably sceptical that the BoJ will be able to keep the yen down in these circumstances.

The other focus of the day was the pending rate decisions from the RBA and the BOJ which as expected turned out to be non-events.

The Bank of Japan (BoJ) began to lower interest rates in July 1991, soon after property prices began to decline.

"I don't think Kan was that critical of the BOJ, " the first source said. "The BOJ and the government have been working hand in hand. "

He said: "We have to work to bring the exchange rate to an appropriate level, including co-operating with the Bank of Japan. "

Slightly more than a decade ago, I spent many hours at the Bank of Japan talking with officials about the paradoxes of ultra low rates.

TOSHIHIKO FUKUI, the wily governor of the Bank of Japan (BoJ), would dearly like to raise interest rates.

Second, the Bank of Japan's ability to help the economy is limited.

At the time, the Bank of Japan financed a large fiscal expansion by printing money.

In a sign of its alarm over the economic outlook, the BoJ said it would buy corporate bonds rated A and higher from next month.

Meanwhile, the Bank of Japan has announced it will spend up to Y1, 000bn buying shares from banks.

The BOJ is now affiliated with the White Dragon Society and wants the money to flow to white hats within the pentagon.

The BoJ's resistance to acting more forcefully may be rooted in its own analysis of its earlier experience.

Yesterday, local media quoted unnamed sources suggesting the BoJ might be willing to postpone raising rates.

Meanwhile, credit-market turmoil creates a quandary for the Bank of Japan (BoJ).

The BoJ will initiate plans to make it simpler for firms to acquire funding, with exact details to be decided at today's meeting.

Second, the BoJ stated that it would maintain its virtual zero-rate policy until there was "medium- to long-term price stability" .

The politicians are also expecting the BoJ to give growth a shove by means of its monetary policy .

The BOJ itself appears to believe that deflation is not a monetary problem but one of low productivity.

The BOJ was also facing strong pressure from the government to take action to help bring the economy out of deflation.

On April 27th the Bank of Japan (BoJ) will publish its half-yearly outlook, which is expected to be upbeat.

A second reason is the BoJ is not at liberty to act like the SNB.

But the BOJ decision this week could be a close call as some within the central bank are reluctant to cut already low rates further.

Nomura said the BOJ could increase the scale of its asset purchases to 8-10 trillion yen.

The weakness of the dollar also prompted the Bank of Japan to intervene to cap gains in the yen for the first time since 2004.

We expect the BoJ to unanimous vote for rates to remain on hold with a great focus on developments in financial markets.

If so, more yen selling by the Bank of Japan is surely in the offing.

Perhaps the only economic events which will give the markets pause will be the BoJ and RBA rate announcements this week.

That could limit the efficacy of any fund provisions, unless the BOJ asks the government to guarantee loans to smaller banks, analysts said.

According to the Bank of Japan's index of the real effective yen rate, it is much closer to its lows than highs of the past 20 years.

The Bank of Japan and the European Central Bank should follow suit.

the expectation that the BoJ would raise interest rates again this year has faded as a result of slower economic data.

The first is as straightforward as entering a few digits on banks' current account balances at the BoJ.

That move was immediately reversed to new highs just over 82. 00 on what was thought to be possible BOJ verbal intervention.

Since the BoJ abandoned "quantitative easing" in March, Japan's monetary base has withered.

But most economists, including those at the BoJ, had expected that, by now, wages would have responded to the extended recovery.

The decline in GDP is fuelling calls for more aggressive measures from the government and the Bank of Japan.

It may also seek help from the BOJ, which could ease policy again to limit the strong yen's negative impact on business sentiment.

The BOJ has made up to Y3 trillion available to commercial banks at a rock- bottom 0. 1% interest rate .

The BOJ intervened to combat JPY strength and increased the amount of its asset purchases yet again.

The risk of central bank intervention remains elevated as the SNB and the BOJ have shown a willingness to act with measures taken last week.

Perhaps this is one explanation for the government's and the Bank of Japan's (BOJ's) failure to end Japan's long run of falling prices.

Each intervention since September has come within two weeks of the BoJ adjusting its principal monetary policy tools.

Any further increases in JGB sales this year could refocus attention on whether the BOJ will step up its purchases.

That alone gave the Bank of Japan (BoJ) reason to act on October 5.

Should the BOJ come back in it likely means they mean business and will continue to fight yen appreciation efforts.

Still, the BoJ seems willing to respond to a worsening economic climate and to political heat.

This month the BOJ will unveil a radical measure for "strengthening the foundations for economic growth" that borders on fiscal policy.

The deflator figures show downward pressure on prices remain, making it difficult for the BOJ to consider an exit policy.

The more the BoJ generates this kind of profit for those who bet against it, the more attractive this strategy becomes for all speculators.

Earlier we saw the BOJ rate decision, as well as the RBA meeting minutes and both went off without much fanfare.

A third reason is that fiscal constraints mean the BoJ may have to work even harder to prevent deflation and juice up the economy.

Greece. In Tokyo, the BoJ sold yen in a bid to limit the effect of the rising currency on Japan's export-driven recovery.

But even if the BoJ's action has little impact on the world economy, it has a totemic significance for Japan itself.

We see a sharp correction in the yen and the BOJ might maintain its dovish policy stance at a meeting next week.

ironically , after the boj raised rates and burst the bubble , american bankers and policymakers were quick to lecture the japanese.

The BoJ stated domestic demand could soften further and both downside risks to growth and upside risk to inflation remain intact.

This made him the second BoJ board member to use the "recession" label.

Just as the BoJ failed on that score, so, too, did the Fed.

The combination of fiscal expansion and government-bond purchases by the BOJ should work better.

BOJ officials have pointed out that Japan has an ample surplus of savings to pay for reconstruction.

On Monday, look for Australian monetary policy meeting minutes and the Japanese BOJ rate decision and press conference.

Analysts continue to mull over how and what the BoJ can deploy in terms monetary policy to calm the Yen's rise of late.

While other central banks consider cutting rates, the BoJ's governor, Toshihiko Fukui, is itching to raise them.

By providing funds at a 0. 1% interest rate, the BOJ hoped the scheme could act as a catalyst to stimulate economic growth.

To achieve this result, the Bank of Japan must co-operate with the government to avoid an excessive strengthening of the exchange rate.

In return, the BoJ should commit to keeping long-term rates low by increasing its purchases of government bonds.

The BOJ is also expected to keep the rates unchanged at the lowest level in a range of 0. 0% to 0. 1%, to help stimulate the economy.

The BOJ will focus on providing liquidity, possibly by expanding market operations.

Of the three main central banks, the BoJ is key because Japan is more involved in risky trades around the world.

Mr. Reading argues the BoJ should lift interest rates back to normal levels soon.

The BOJ is expected to forecast near-flat growth in gross domestic product for the fiscal year ending in March 2012.

"This could possibly counteract the (BoJ) intervention, " LPL's Valeri said.

BOJ Gov. Masaaki Shirakawa specifically cited the yen's strength as one reason for the move.

After a rash of negative data on Tuesday, today's BoJ's quarterly Tankan survey for Q3 confirmed deterioration in business conditions.

It will take the BoJ a long time to recover its international credibility as an independent custodian of Japanese monetary policy.

Under quantitative easing, the policy introduced in 2001, the BoJ floods the market with excess liquidity.

Money multipliers, as the BoJ has learnt, can stay broken for a long time.

He expects the BOJ to ease policy again in the first quarter of this year.

We expect the BOJ to reiterate its pledge to keep interest rates unchanged to spur growth.

"Every loss for the BoJ is a profit for someone else in the FX market, " he says.

It remains unclear how effective the BOJ's intervention will prove.

The BoJ's injection helped pull yields on the country's sovereign debt sharply lower.

Until yesterday, most had thought the government would object if the BoJ moved swiftly to alter monetary policy.

Tokyo's Nikkei shares index climbed more than 3 per cent ahead of the BoJ announcement, but fell back to close up 1. 8 per cent.

The Bank of Japan also lowered its main interest rate from 0. 1 per cent to a range of 0. 0-0. 1 per cent.

Last week, in its half-yearly outlook, the BoJ slashed its inflation forecast to only 0. 1% in the year to March 2008.

A BoJ survey released on July 4th suggested that ordinary Japanese think inflation has run at 10% over the past year.

Was it setting a more explicit goal?

Finally, the BoJ has to restrict its intervention to one day only.

The BOJ kept interest rates unchanged at 0. 1% and the 30 Trillion Yen credit program was also left untouched.

One way to see this is to compare Japan in April 1995, when the BoJ's policy rate was 1%, with America in October (see chart 1).

The ECB should lower interest rates while the BoJ should scale up its asset purchases.

Whether the BoJ's actions will have any lasting impact on the economy is another matter.

The BoJ can start by being more assertive.

The BoJ might feel vindicated.

The BoJ will hold three board meetings between now and the end of April, the first of which is next week.

The BOJ began doing quantitative easing in 2001.

Luckily, the signs from this move suggest the BoJ is very cognisant of this risk.

The forecast is a median of BoJ policy board member's growth predictions that is used as a reference for setting monetary policy.

This week the BoJ kept its benchmark interest rate on hold, at just 0. 5%.

The BOJ is still buying 1. 2 trillion yen a month of JGBs, and 10-year yields were at 1. 375 percent on Monday.

In addition, the BoJ is doubling its asset-purchase programme to Y10, 000bn to keep longer-term rates in check.

Hoarding is exactly what happened in Japan earlier this decade when the Bank of Japan implemented quantitative easing between 2001 and 2006.

Will the BoJ's actions have any impact on the economy?

The BoJ is under intense pressure to act after the yen soared to Y85 to the dollar, threatening the recovery in Japan's exports.

One factor that might have skewed the BoJ survey is that the Japanese have already had a decade to adjust their inflation expectations;

Background of Banks' Efforts to Enhance Risk Management and the BOJ's Initiatives to Encourage These Efforts

BoJ Monetary Policy Meeting Minutes for August

BoJ Monetary Policy Meeting Minutes for March

BoJ Monetary Policy Meeting Minutes for April

BoJ Monetary Policy Meeting Minutes