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Portfolio : BoJ to curb deflation

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GUANGDONG COUNTRY GARDON SCHOOL INTERNATIONAL SECTION IBDP CLASS(1) GRADE(2) ZHENG ZHUO (NIKON) Portfolio : BoJ to curb deflation , http://www1.chinadaily.com.cn/cndy/2002-04-05/64345.html Beating deflation " can only be achieved by restoring the Japanese economy to a sustained recovery path. To this end, revitalizing private demand through structural reforms such as tax system reform is indispensable." The governor said. I am quite agree with what he said, but on beating deflation, one step further, or on restoring the economy, there are a lot more for Japanese to do. Although Japan successfully navigated its way through the fiscal year end on March 31 without a crisis, the banking system remained in sever condition. ...read more.


Japan's banks must write down the value of their portfolios to current market values. They BoJ has taken such action several times in recent months, with little impact. In addition, the banks should keep loaning in order to strengthen the currency liquidity, also strengthen the credit and adopt a more forward-looking approach to loan classification and provisioning. Anyway, just be more careful than before on loaning to avoid bad debts. The most common way to deal with deflation injecting money into the market . So the more we have , the higher price will be strengthen. But many people are concerning about the currency devaluation caused by the expansion of the amount of money. ...read more.


Structural problems lie at the heart of Japan's economic difficulties. For more than a decade Japan has adjusted too slowly to the forces of globalization, lagging behind in productivity growth. The country must remove the obstacles to efficiency in the domestic sectors of the economy. They also need to introduce measures to strengthen the regulatory structure improve corporate governance, increase labor market flexibility. Such policies will be important to generate new investment and employment opportunities, and raise productivity growth over the medium term. From deflation to structural reforms, none of them will be easy to implement, but bold measures are needed to return the economy to strong, sustained growth. The past decade has proved that the risk had been delayed. Now is the time to act. ...read more.

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