This week is a week for a special focus on the banks around the world. Today, I will take a closer look at the banks in Japan.
s interest rate peaked in the 70s and 80`s at about 9%, and it went down to 6% in 1991. Then it started to fall down with the stock market. As you may know, Japan has printed tons of money and a great recovery has never happened.
Japan are in a very special situation. The Bank of Japan left the interest rate unchanged at -0,1% at its December 2016 meeting, as widely expected. In addition; policy makers also decided to maintain its 10-years government bond yield target around 0% and viewed a moderate recovery trend in the economy had continued while exports has picked up.
With regard to the amount of JGB`s to be purchased, the Bank will conduct buying at more or less the current pace. An annual pace of increase of about 80 trillion yen.
The biggest banks in Japan are up about 50% since the election.
On top of all this, Japan will continue with its craziness and monetize about $670 billion`s worth of bonds per year.Wow!
Japan`s economy has continued its moderate recovery trend, and overseas economics have continued to grow at moderate pace, although emerging economies remain sluggish in part. In this situation exports have picked up.
Prime Minister Shinzo Abe said the sales for American cars are poor, pushing back after President Donald Trump described the trade imbalance on vehicles as «unfair». Japan exported 1,6 million cars in 2015. Sales of American cars in Japan are almost non-existent, while only 19 000 cars were sold in Japan in 2015, trade minister Hiroshige Seko said.
The reason for the bad sale is competition and not tariff.
Despite all the noise from the U.S and Trump`s fiscal and trade policies, and a number of unclear factors like Brexit, trade deals and the global economic situation, Japan will see its economy grow in 2017 on the back of the weak yen and government steps to stimulate sluggish consumption, economists have said.
They predict that 2017 will be a positive year for Japan, and the government looks to craft more measures to help boost consumption.
A weaker yen against the dollar will also help boost Japanese exporters and their revenue.
Shinzo Abe will meet Donald Trump in Washington 10 February this year.
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