Slowing global trade, a strong currency and disruption from severe floods in Thailand all took their toll on the Japanese economy during the final quarter of 2011, data showed Monday, setting off a contraction that is likely to increase pressure on the central bank to step up efforts to bolster the economy at its policy meeting this week.
The Japanese economy, the third-biggest in the world after those of the United States and China, shrank 0.6 percent in the October-December quarter compared with the previous three months, according to data released by the Japanese Cabinet Office. On an annualized basis, the contraction was 2.3 percent, a sharp turnaround from the 7 percent increase recorded three months earlier, and markedly worse than analysts had expected.
The BOJ eased its
policy on Tuesday by boosting asset purchases and defined 1
percent inflation as a near-term goal, signalling its resolve to
take further action to beat deflation in the face of growing
political pressure to support a fragile economic recovery.
In a move that surprised markets, the central bank added 10
trillion yen ($130 billion) to its 20 trillion yen pool of funds
set aside for asset purchases, with the increase earmarked
entirely for long-term government bonds.
Read more...
Currently rated 1.0 by 14 people
- Currently 1/5 Stars.
- 1
- 2
- 3
- 4
- 5
Just seven currencies account for 80% of the forex market, and the Japanese yen is one of the largest currencies, in terms of international trade and forex trading. That is only fitting, as Japan is one of the largest economies in the world, with the third-highest GDP among nations and the fourth-largest exporter in dollar terms.
All of the major currencies in the forex market have central banks behind them. In the case of the Japanese yen, that is the Bank of Japan. Like most developed country central banks, the Bank of Japan has a mandate to act in a fashion that encourages growth and minimizes inflation. In the case of Japan, however, deflation has been a persistent threat for many years, and the BOJ has pursued a policy of very low rates in the hopes of stimulating demand and economic growth - at various points in the 2000s, real rates in Japan were actually slightly negative.
To find out more about the Japanese economy and what drives the yen, read on...
Currently rated 4.2 by 5 people
- Currently 4.2/5 Stars.
- 1
- 2
- 3
- 4
- 5