Tepid economic data report raises BOJ stimulus pressure

companies demand free money or the yen gets it

It seems as if the world is conspiring against Jecon...

There really isn't much else the BOJ can do. It's shot nearly all of its bullets.

Hate to say this but as I and a few others on here - Globalwatcher, SmithinJapan et al - predicted, way back in 2013, the Kuroda experiment was going to end in a pretty messy affair.

While others - Jefflee and Nigelboy - were all for it and predicted it would succeed.

Shirakawa, the previous BOJ president was right and if Kuroda had any honor, he's fall on his sword and resign.

Anyway one hour to go to the BOJ decision. I don't expect much and can see the yen strengthening from its now 105 position to the dollar.

Any of you with shares in the Nikkei today, enjoy the ride down.

It seems as if the world is conspiring against Jecon... yes there are other first and second world economies that would love to take the remaining manufacturing jobs away from Japan. Japan has every right to fight back to regain some jobs for its citizens. Japan will never survive on imports and domestic consumption alone. unless it intends to run massive trade deficits and continues to borrow from others to fund its credit, like the US. but if you never intend to repay that credit and struggle just to pay just the interest on that credit, then borrow away!

wtfjapanJul. 29, 2016 - 11:37AM JST

Japan has every right to fight back to regain some jobs for its citizens.

Yes it does, but it doesn't have the right to beggar their neighbors through currency manipulation.

wtfjapanJul. 29, 2016 - 11:37AM JST

Japan will never survive on imports and domestic consumption alone.

It's not a case of either or not at all, it's a question of balance. I know from your previous posts that you have trouble distinguishing between a trade surplus/deficit and a current account surplus/deficit, but the trade deficit really isn't that important because Japan runs an abnormal current account surplus.

The Japanese people as a whole don't need such a large current account surplus or the neo-mercantilist policies that maintain it, their standard of living suffer because of them through the restriction of imports and the quality and price of those limited imports that get through the non-tariff barriers. It's the Japanese government who needs them, to sustain its deficit spending public works bridges/roads/trains to nowhere. The BOJ under Kuroda is feeding the Japanese government's bad habit, rather than trying to cure it.

wtfjapanJul. 29, 2016 - 11:37AM JST

but if you never intend to repay that credit and struggle just to pay just the interest on that credit, then borrow away!

That's exactly what the Japanese government intends to do. The only difference between the US and Japan is that the US borrows other people's money and in all likelihood will not pay it back, while the Japanese government robs from its own people.

Which is worse, not difficult?

promises to cut through red tape have been slower

slower, to non-existant, except in the form of talk, talk, talk.

The central bank is nowhere near a two-percent inflation target seen as critical to saving Japan’s economy.

Inflation is not critical, cutting through red tape is.

Money printing has failed to produce growth (who'd have thunk it?). Time to tack to a difference course.

"Spending by households across the country fell in June while inflation dropped for a fourth straight month, in a fresh blow to Abe’s war on deflation."

Abenomics is too timid to wake up the inflation genie. Double the stimulus package and watch inflation go to the roof And people will Start Spending when they Feel they are holding Worthless Yen. Go Radical but of course I am not wishing Zimbabwe hyperinflation on Japan.

Which is worse, not difficult? so the US robs from its friends the J gov from its own people and you somehow think Japan is the larger villan!? thats all great until your friends decide to stop lending to you.

wtfjapanJul. 29, 2016 - 12:21PM JST

Which is worse, not difficult? so the US robs from its friends the J gov from its own people and you somehow think Japan is the larger villan!? thats all great until your friends decide to stop lending to you.

They, China etc, have no choice, if they want to keep those large trade deficits.

It's not any believe in the US government's credit worthiness that keeps the likes of China, Japan and Korea buying those US treasuries; any believe in that ended in 1971, under the Nixon presidency. The US has them by the short and curlies, as long as they're addicted to selling in the US markets.

The role of any national government is to look after the interests of its own citizens first and foremost. Yes I do think it's worst to rob from your own.

people will Start Spending when they Feel they are holding Worthless Yen

I think the people who have a clue would exchange their yen for other more reliable stores of value, and not start spending.

The US has them by the short and curlies, as long as they're addicted to selling in the US markets. and this is just one of the indirect manipulation the US has over other countries along with the reserve currency that isn't linked to gold or anything for that matter. and then the US continues to complain that others don't trade fairly, LMFAO the hypocrisy is thicker than shite, your not blind to it I hope. The US wants to run a rigged system which they make the rules for. You wonder why Russia want to sell its oil in Rubles and China makes its own Asian development bank. Its the US who's indirectly responsible for most of the so-called trade imbalances, manipulations and financial crisis that hits world markets. this is a little off-topic, but you've got to be thankful that China and Russia have veto power in the UN or the US would control the world.

...and Abe’s plan to buoy Japan’s once-booming economy have looked increasingly unrealistic.

once-booming? yes, once upon a time, people born in late 90's don't know.

Why spend on things you have no room for? Why throw away perfectly good items just so you can spend?

Confusing.

I think the people who have a clue would exchange their yen for other more reliable stores of value, and not start spending.

Yep. Who holds onto yen in any amount these days?? On a hiding to nothing. Everybody I know divests themselves of yen into dollars/ swiss francs/gold etc as soon as possible after getting hold of it.

Stimulus packages don't work. We had similar about 10 years ago in Australia where in the wake of the GFC the government went on a massive spending spree - part of that was giving each taxpayer the equivalent of 80,000 yen. You know what happened? No one spent a dime.

Australians have the highest personal debt in the world, yet people still banked the stimulus cash. Japanese are notoriously careful with their money, so anyone in government thinking people are going to spend their cash at the nearest department store has rocks in their head.

The US has them by the short and curlies, as long as they're addicted to selling in the US markets.

Garbage I guess Japan is not addicted to selling to Asian markets, Australian and New Zealand markets, the Central and South American markets, not to mention the European markets? It is Japan which has always had the advantage in trade with America. To assist Japan's growth after the end of the second war, tariffs were abolished on things like cameras and personal electronics, which by the 1980's resulted in the end of television and radio production in the US, and eventually the disappearance of the American photographic industry. But in return for free distribution of Japanese products in America, Japan has offered nothing in return. American manufacturers and farmers are more or less closed out of the Japanese market. Take a look at Japan's recent trade agreement with Australia. japan gets immediate zero-tariff access to the Australian auto market, while reducing tariffs on Australian beef to only 19%. Japan calls this "free trade", but to Japan free trade occurs only when Japanese goods are not tariffed.

America turned a blind eye towards decades of Japanese currency manipulation, which was enacted to flood American markets with cheap Japanese goods, and make American made goods far too expensive for Japanese consumers. This practice finally ended during the Reagan administration with the Plaza Accord.

America does not have have Japan by the short and curlies. All of Japan's current economic injuries are self-inflicted, and are all the result of avoiding competition at any cost, even to the extent that Japanese companies refuse to compete against each other. It is the LDP and Japan Inc which have the country by the short and curlies, and no one else.

wtfjapanJul. 29, 2016 - 01:01PM JST

The US has them by the short and curlies, as long as they're addicted to selling in the US markets. and this is just one of the indirect manipulation the US has over other countries along with the reserve currency that isn't linked to gold or anything for that matter. and then the US continues to complain that others don't trade fairly,

Intelluctually you're a very confuse person when it comes to finance.

It isn't the US who is running abnormal trade surpluses with these countries, it's the other way around.

Abnormal trade surpluses built on deflating their currencies by buying US treasuries and thus making their goods cheaper in the US market and US good more expensive in their own domestic market; butter in Japan, by my purchase last week is 350% more expensive than I paid in the US and the US butter was a much higher quality. To maintain this monetary advantage they have to put those excess dollars somewhere, otherwise their currencies would continue to rise, until the surpluses ended/

Anyway I told you so. The BOJ just came out with its statement (an hour and half later than it was timed, which is a bit worrying) and its all wind and no action, and the Yen just hit the Y103 mark to the dollar and the Nikkei is losing 2%.

As for stocks, the TOPIX closed up 1.20% today, albeit after going up and down like a bungy jumper. The BOJ will buy more ETFs, so I guess that's why (although it's not a reason to make me want to buy Japanese stocks).

Fortunately there is no increase in the already crazy pace of monetary easing through bond buys, and the yen has gained some strength in the knee-jerk reaction. Long may it last, but after adding trillions of yen to the financial system without the desired results, I continue to have fears about how this debacle eventually ends.

sangetsu03Jul. 29, 2016 - 01:42PM JST

Garbage I guess Japan is not addicted to selling to Asian markets, Australian and New Zealand markets, the Central and South American markets, not to mention the European markets?

Stop going off on a tangent.

If you had bothered to read, WtfJapan and I were discussing was that the USA has the neo-mercantilist Asian economies by the short and curlies into buying US treasury bonds and thus financing US debt, otherwise they wouldn't be able to deflate their currencies and continue having such big trade surpluses with the US.

This has been the way of the US since the final years the Vietnam war, when Nixon, instead of considering domestic expenditure, decided to run the war on a deficit financed by others, Japan and Europe.

In the 1970s the Japanese and the Europeans were willing participants in the Faustian pact.

In the 1980s Japan alone was a willing participant.

In the 1990s Japan, Korea and Taiwan were willing participants.

In the first decade of the 21st century China and Japan were willing participants.

In the second decade of the 21st century, China alone was the willing participant.

The point is, to discredit wtfjapan's argument, is that US dollar fluctuations and debt, until 2008, have been to the agreement of all parties concerned; hardly manipulation by one sovereign state against the rest.

Now Japanese fiscal policy is a different cake altogether.

It isn't the US who is running abnormal trade surpluses with these countries, it's the other way around. so whos fault is that, US workers will always be more expensive than workers in Asian markets, it not their fault that US citizens want the cheapest prices available all the while taking home a large pay packet. If anybody to blame its big Amercian corporations that have moved and continue to move production to cheaper countries. The US currency could crash tomorrow and it'd be still cheaper to produce goods in those countries. America is addicted to cheap imports , so unless the US puts huge tariffs on imports , American corporations will continue to manufacture goods in the countries that maximise their profits, they couldn't care less about US jobs if it gets in the way of their profits. You reap what you sow America

wtfjapanJul. 29, 2016 - 07:57PM JST

so whos fault is that, US workers will always be more expensive than workers in Asian markets,

Japan isn't competing with American workers for the same job, the Japanese are competing with other Asians. Who, normally I wouldn't mention this, but this is you, work a lot cheaper than their Japanese compatriots and that's really who Japanese currency is directed at

Your comment is a bit like Sangatsu's silly observation about the Australian car industry. There hasn't been an Australian domestic car industry since the 1990s and from next year there won't be any new car assembled in Australia

So who gives a care about what the tariff on Japanese car imports to Australia will or will not be, they're not competing against anything in Australia?

There are still Japanese beef farmers in Japan....

Cogito ergo... the Japanese still have beef tariffs.

This site has really gone down in quality intelligent comments over the last 2 years.

Japan isn't competing with American workers for the same job. you think with all the Trump and Clinton hype it was Japan and China are the big bad wolves devouring American industry. America industry has been bashing Japan since before the plaza accord and now its Chinas turn, and in the next 10~20yrs or so it'll probably be India , Indonesia, etc etc.

Until America grows out of its cheap import addiction, unlikely, the cycle will just continue.

Stimulus is pointless, because it only creates jobs in the short term. Once people spend it, demand drops. So jobs are made unto they have all spent it....Now it's gone demand drops off waited..

This is how you do it!!

I would start self funding departments, that hand each state savings of billions of dollars, that all goes to employing people.

If a department spends $400 million pa in budget cost, it get's given $10 billion dollars in a safe interest fund, that will make it $650 million pa. You spend the $400 million but save back up the extra $250 million pa. It's that $250 million interest put back in making interest interest, that pays for a 35% budget rise every 10 years, or $15 million dollar rise pa. Self funded for life no more rising cost with pop growth.

Now we have not only stopped a rise in future taxes from stopping funding needed in the future "self funded for life" but we have saved $22 billion dollars that will go to jobs.

So with this $266 billion dollars, they can self fund gov departments and even the publics cost of living like water bills.

At $22 billion dollars of budget savings, they can now employ 1.2 - 1.5 million people. That will see $20 billion dollars extra pumped in the economy, and will create mass more jobs + stop a rise is departments funding.

I have no idea how many stimulus Japan has already done, but AU has spent $500 billion and would of make mass millions of jobs why doing the above to every budget.

Japan needs to self fund state department's and public cost. This will show good outlook and cerate something like 2 million jobs.

What i have done here is made the states employ millions of people. Them spending there wages creates demand and saves them money from people not receiving gov payments, and brings them in extra work wage tax money.

This is the best idea, and please say why not?

Helicopter money WILL work in stimulating Japan's economy, if it is done right. In the US, George W. Bush gave us $300 at one point to stimulate the economy, but all we did was use it to pay down debt. This did nothing for the economy.

The way it needs to be done is for the BOJ to give poor people their 30,000 yen in scrip, which can only be used to purchase goods and services in the economy and NOT be used to pay off debt. For the sake of its multiplier effect, the scrip should be "signed off" with five verifiable signatures or thumb prints (indicating that the scrip was used five times in purchasing goods and services) before the scrip can be redeemed by the banks.

Hyperinflation is kept under control through the five-fold multiplier effect of the scrip in stimulating the economy of Japan. When scrips are redeemed, thumb prints are gathered and tabulated by computer then run up against those individuals' internal revenue "claims to income" to ensure that black market influences are kept out of the system.

@Wulfe N. Straat But once the money is spent, what happens to that demand?

Demand is more workers to keep up because they are selling more. That is temporary, because one they get $300 - $1,000 each and spend it, demand goes so workers hired go.

My way put's $15 - $18 billion dollars into 1 - 1.5 million "permanent" jobs, by self funding state gov budgets for life. The states in a deal hire more people once they save budget money because it's paid for.

Your correct by not letting them blow it or pay off debt, but forced to spend it.

A big problem is gamblers and drinkers 2.....They blow it.

My system is full proof and 100% creates permanent jobs.

Anyone not liking it explain why? If you can't you know you are wrong and i am right....easy.