Question

Discussion on current central bank interventions and current economic outlook for Japan.

Answer 1

• Japan’s export-oriented economy, which is dominated by prolific auto makers and innovative technology companies.

• After decades of flat to negative economic growth,Japan’s economy has experienced a sustained recovery of late.

• Japan’s long-struggling economy may be nearing the light at the end of the tunnel, but there is by no means any guarantee that it will emerge on the other side any time soon. Gross domestic product (GDP) growth has continued to improve this year, rising 2.5% in the second quarter

• Bank of Japan is the Central Bankof Japan.

• The Bank of Japan is forging on with massive monetary stimulus while its peers chart a course for policy normalization. There’s little prospect of any change soon, given inflation has stalled and remains less than half way to the BOJ’s 2 percent target.

• Most economists expect Governor Haruhiko Kuroda to keep his current yield-curve settings in place for the foreseeable future, with the short-term rate locked at -0.1 percent and the 10-year bond yield target at 0 percent. If there is any tweaking, it will most likely be with the 10-year yield. While the BOJ has held onto a guideline of buying around 80 trillion yen of Japanese government bonds a year, the actual level of purchases has dropped well below this since Kuroda's focus switched to yield management in late 2016, making his policies more sustainable.

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