Oops! Spoke Too Soon On Japan’s Honesty!

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Well, heck.  Just last month, I was giving Japan props about their honesty……

Japan Loses Pretense — Abe Demands Currency Manipulation

Abe said he will pick someone who agrees with his views on the need for bolder monetary easing to succeed BOJ Governor Masaaki Shirakawa when his term expires in April next year.

“At this month’s policy meeting, the BOJ said it would examine (setting an inflation target) at its next meeting” in January, Abe said on television on Sunday.

If it doesn’t, we’ll revise the BOJ Law and set up a policy accord with the central bank to agree on an inflation target. We may also seek to have the BOJ held accountable for job growth.”

Here, we see that incoming PM demanding currency manipulation and stating that the BOJ would not be independent of the government. 

So the South Korean central bank governor had a bit of criticism for this policy, saying the stimulus program was aimed at weakening the yen and undermined central bank independence.  Which, is exactly what it does.  This would seem to be irrefutable.  But, that didn’t stop Japan from trying to refute this statement of plain fact.

Akira Amari told the World Economic Forum in Davos it was up to the market to determine the currency’s exchange rate, and the Bank of Japan had chosen independently to sign a joint statement with the government on actions to fight deflation and revive economic growth.

“You might think there’s a deliberate policy to drive down the value of the yen but we in government refrain from commenting on the exchange rate of the yen,” Amari said in response to criticism of Japanese action.

Oh, well, I see now.  Because you don’t comment on the exchange rate means that you’re not deliberately trying to devalue the Yen.  Even though, you’re trying to devalue the Yen and this is occurring because your government threatened you to do so.  Is it bad that I hate kleptocrats and their wordsmithing? 

Read more here and here.

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2 Responses to Oops! Spoke Too Soon On Japan’s Honesty!

  1. Bruce says:

    The problem of the leopard is that she eats the one at the back who runs the slowest.

    Which makes her a consumer. A strong dollar is great for consumers (cheap plasma screens, yay!), but not for lemmings like Mr Bernanke and Mr Abe. I wonder if leopards like how lemmings taste?

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