News from Kuroda-san in Japan. Investors clearly don’t believe the governor of the Bank of Japan (Haruhiko Kuroda) can hit the bank’s inflation targets. Japan’s Nikkei 225 fell 2.42% under the 16,000 level. The benchmark index is now down over 17% year-to-date.
Translation: quantitative and qualitative easing and “minus” interest rates don’t work.
Ouch
Inflation expectations in Japan remain low. That’s more feedback to Japan’s central bank that you can’t grow an entire economy by printing more money. The evidence is mounting. If Japan is a template for other central banks on how to deal with high debts and low growth, it’s a template for stagnation, lower growth, disinflation, larger debts and unequivocal failure.
Kuroda told the Japanese parliament that he’ll “undertake additional monetary easing without hesitation.” Good for him. The lower the Japanese stockmarket goes, the more resounding the failure.
Category: Central Banks