Talk of a «currency war» has gained momentum since the yen started to fall in November amid expectations
of aggressive monetary easing from Japan.
Analysts say it will take time for the yen's slide to 3-1/2 - year lows, which has been driven by Prime Minister Shinzo Abe's push
for aggressive monetary easing and fiscal pump priming, to feed through to improved exports even though it immediately raises the price of imports.
In a bid to revive Japan's economy and end two decades of deflation, Japan's Prime Minister Shinzo Abe plans to combine fiscal stimulus from the government
with aggressive monetary easing.
The yen soared 1 percent against the dollar and euro on Tuesday after the Bank of Japan said its open - ended commitment to buy assets would kick in only next year, disappointing those who had expected
more aggressive monetary easing.
My impression is that without a shift back to uniformly favorable market internals, the continued faith in monetary support may prove to be the same awful bet it was during the 2000 - 2002 and 2007 - 2009 collapses, both which were accompanied
by aggressive monetary easing all the way down.
In that environment, previously benign overvaluation can quickly become disastrous, and as we saw during 2000 - 2002 and 2007 - 2009, even persistent and
aggressive monetary easing doesn't reliably support the market.
The central bank would play a key role in the so called «three arrows of Abenomics», a three - pronged strategy that
comprises aggressive monetary easing, flexible fiscal policy, and supply side reforms to spur private investments.
Prime Minister Shinzo Abe nominated Kuroda, president of the Asian Development Bank and an advocate
of aggressive monetary easing, to become the new governor in a push for bolder efforts to end nearly two decades of deflation.
Japan's government on Thursday nominated Haruhiko Kuroda, an advocate of
aggressive monetary easing, as the next Bank of Japan (BOJ) governor in a move that could see radical central bank policies push the economy out of a rut.
The government also submitted to parliament its nomination of Masazumi Wakatabe, a professor at Waseda University and an advocate of
aggressive monetary easing, as deputy governor.
Prime Minister Shinzo Abe, elected late last year on promises to revive the world's third - largest economy, has implemented a policy mix of increased public spending and
aggressive monetary easing.