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18 Apr 2013
Forex Flash: G20 set to tolerate Abenomics for now - DBS Group
FXstreet.com (Barcelona) - DBS Group analysts believe that the G20 will tolerate Abenomics as long as it is not an explicit “beggar thy neighbor” policy.
They feel that Japan will need to reassure other G20 countries that its domestic policies will benefit the world economy by encouraging domestic demand. They add that Fed Chairman Ben Bernanke had defended quantitative easing measures in the US as an “enrich thy neighbor” policy. So far, the G7, IMF, Australia and China have voiced cautious support for Japan’s efforts to reinvigorate its stagnant economy.
They continue to explain that since the start of the yen’s depreciation last November, Japan’s leading index has improved steadily to its highest level before the 2008 global crisis. They write, “Yesterday, a Japanese government survey unveiled that more than two-thirds of the Japanese public believe that inflation will rise in the coming year. The Nikkei reported this morning that the Bank of Japan (BOJ) policy board meeting on April 26 may revise up its inflation projection to 0.5-1.0% from the present 0.4% for fiscal 2013, and to some 1.5% from 0.9% for fiscal 2014, before hitting 2% by fiscal 2015.”
They feel that Japan will need to reassure other G20 countries that its domestic policies will benefit the world economy by encouraging domestic demand. They add that Fed Chairman Ben Bernanke had defended quantitative easing measures in the US as an “enrich thy neighbor” policy. So far, the G7, IMF, Australia and China have voiced cautious support for Japan’s efforts to reinvigorate its stagnant economy.
They continue to explain that since the start of the yen’s depreciation last November, Japan’s leading index has improved steadily to its highest level before the 2008 global crisis. They write, “Yesterday, a Japanese government survey unveiled that more than two-thirds of the Japanese public believe that inflation will rise in the coming year. The Nikkei reported this morning that the Bank of Japan (BOJ) policy board meeting on April 26 may revise up its inflation projection to 0.5-1.0% from the present 0.4% for fiscal 2013, and to some 1.5% from 0.9% for fiscal 2014, before hitting 2% by fiscal 2015.”