01/29/2016 - Financial Repression In Japan – Negative Interest Rates – Currency Wars To Intensify
8 Days Ago – the Bank of Japan governor Haruhiko Kuroda, said No Plan to Adopt Negative Rates Now
Today: the Bank of Japan adopts Negative Interest Rates!
“The BoJ actions should lead to further intensification of global currency wars with central banks around the world trying to engineer sustained competitive devaluation against the background of slowing global trade and growth as well as persistent commodity price disinflation. With its latest measures the BoJ will allow Japan to borrow more growth from its trading partners and limit the severity of the imported disinflation .. Almost 60% of the households’ financial assets are held in deposits. If indeed, the Japanese banks pass on some of the costs from the BoJ’s penalty rate to their depositors, this will result in a negative wealth effect, reducing the purchasing power of the Japanese consumers. Domestic demand should suffer and Japan’s contribution to global growth could decrease further. The BoJ’s measures thus should result in more currency wars and continuing slowdown in global trade and growth.” – Credit Agricole’s Valentin Marinov
