01/27/2016 - Yra Harris: Japan Seeks Chinese Capital Controls
“The most important news item of yesterday was buried on page 6 of theFinancial Times: BOJ KURODA SEEKS CHINESE CAPITAL CONTROLS. This is significant for a Governor of a major central bank to openly suggest the imposition of ‘stringent capital controls to help stem massive outflows of hot money from China and stabilize hot money’ .. Governor Kuroda seems concerned that if the Chinese YUAN continues to weaken it will cause problems for the Eastern Asian economies and put pressure on other central banks to pursue policies of currency weakness. Japan would have to embark on more QE to deal with Asian depreciation and it appears that Kuroda-san is reticent about buying more JGBs. It seems Kuroda wants the Abe administration to continue its structural reforms, which have fallen far short of its stated goal. It seems many central bankers have tired of more QE as it appears that the vast monetary purchases have had limited success.”
