Forex Blog: Currency Trading News & Analysis.

June 13th 2005

Bank of Japan to tighten monetary policy

For the last few years, Japan’s economy has been nothing short of pathetic. Unemployment is still high, and deflation is a constant concern. Recently, however, it seems Japan may be on the brink of growth, and Japan’s Central Bank is already anxious to tighten.  Maybe a little too anxious. The Bank of Japan is determined to contain inflation- which is currently infinitesimally low- at the expense of economic growth. It has already announced that it will begin tightening monetary policy, through a combination of higher interest rates and a lower money supply. It has also hinted towards a tightening of fiscal policy- raising taxes to offset a large budget deficit. However, economic growth can not yet be taken for granted.  The Economist reports:

Recent mis-steps by both politicians and technocrats have highlighted three of the biggest risks to recovery. One is China, with which Japan’s relations hit a new low this week. Figures released on May 25th showed…the volume of exports fell, and has been roughly flat in the past three months.

Read More: Land of the Three Mistakes

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Posted by Adam Kritzer | in Central Banks, Japanese Yen | No Comments »

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.