Wednesday, August 03, 2016

The World Looks To Japan
To Be The First To Use Helicopter Money
"Every minister of finance and central bank head is noting the uncertainty caused by the BREXIT vote and is being cautious ... The markets are expecting a 28 trillion YEN fiscal package from Abe but there is much dissension about the various elements that will be the key components. Will it be large infrastructure projects such as PORT enhancements in rural areas, a new high-speed train or a reinvigorated LENDING SCHEME, which will provide cheap funding for small and medium enterprises? There has been discussions about tuition and wage enhancements for the lower-income Japanese citizens. Combined with the recent BOJ announcement about enhanced U.S. DOLLAR lending facilities for Japanese financial institutions the NIKKEI OUGHT to be the bellwether of market sentiment. The NIKKEI rally has stalled since the BOJ disappointed investors with no rate cut and no new additional bond purchases July 29. The increased Nikkei ETF purchases has provided some support for Japanese equities but the sizable YEN rally has been a negative for overall for the stocks of Japanese exporters. THE MARKET NEEDS TO SEE THE CORRELATION OF NIKKEI to the YEN decouple for verification of the success of any Japanese fiscal stimulus policy."
- Yra Harris
link here to the reference

No comments: