Will Japan Follow Up The Easing In China And Europe? This Issue Has Attracted Much Attention.

The Central Bank of China has implemented easing policy to boost the economy, and the European Central Bank released strong easing signals last week.

As Japan's "re inflation" plan is about to derail, market expectations for the Bank of Japan to increase its economic stimulus are also rising.

Bloomberg survey of economists shows that 1/3 of people believe that the Bank of Japan's asset purchase plan will not further expand, 44% of the people believe that the October 30th Japanese Central Bank meeting will launch a new policy, the rest of the people said that the action of the Bank of Japan is from December to April next year.

Kuroda Higashihiko, the governor of the Bank of Japan, launched a large-scale debt purchase plan in April 2013 and expanded it further in October 2014.

He said this year that there are still many options for Japan to launch new stimulus policies, but it should be more innovative.

So what are the options in Kuroda's arsenal?

In Kuroda's economic stimulus plan, buying Japanese government bonds is the main means.

By buying central government bonds, the Bank of Japan expanded the size of the basic currency at a rate of 80 trillion yen (US $664 billion) per year to drive real interest rates down.

Before the scale expansion in October 2014, the Bank of Japan has maintained the scale of 60-70 trillion yen in April 2013.

Although Kuroda hinted that there was still room for more purchases of Japanese government bonds, bond market traders said the liquidity of the market had dried up.

By the end of June this year, the Bank of Japan held 28.5% of Japanese government bonds.

Paris Bank of France predicts that by the end of next year, this proportion will soar to 43%.

Changing the target of buying debt is an option.

The Bank of Japan's current purchases of government bonds expire for 7-10 years, and they may consider buying 9-12 year maturities.

Kuroda's goal is to maintain the annual yen purchase of 2 trillion and 200 billion yen and the purchase scale of 3 trillion and 200 billion yen corporate bonds.

Unlike other components of Kuroda's stimulus package, this part of the stimulus package did not expand in October last year.

The Bank of Japan initially set foot in the market after the 2008 financial crisis.

If the scale of purchase is expanded, it will also raise concerns about which companies' equity and business votes can be selected.

Credit Agricole believes that buying shares is also an option, but it also raises concerns about fairness.

Mizuho Research and Mitsubishi UFJ Securities economists predict that the central bank will expand its economy next time when private banks deposit excess reserves in the Bank of Japan.

It may be reduced to the interest rate paid for this reserve.

The people's Bank of China said in May that the Bank of Japan did not consider reducing the current interest rate of 0.1%, but it is not entirely impossible to make that choice.

Kuroda recently said that the Bank of Japan does not consider reducing the reserve requirement rate.

Other economists believe that the Bank of Japan can even emulate Europe and implement a negative interest rate policy.

The Bank of Japan is now buying ETF at the rate of 3 trillion yen a year, buying J-REITs at the rate of 90 billion yen per year.

Nomura Securities economists believe that the Bank of Japan can expand the purchase scale of ETF to 6 trillion yen per year.

This will push Japan's stock market to a new high.

But on

The purchase has injected vitality into the Japanese real estate industry.

But the Bank of Japan will buy up to three times its original value in October 2014. Under its strict criteria for buying objects, there will be no securities to buy in the next year.

If the scale of purchase is increased, the Bank of Japan will need to buy securities with a rating below AA.

This may be a more innovative tool for increasing stimulus measures in Heitian estuary.

Many economists suggest that if the Japanese government adjusts the composition of asset purchases, local government bonds will be a good new tool.

DBS Research said,

The central bank can consider increasing the purchase quota for "risky assets", including ETF, J-REITs and so on, and can consider the new choice of local government bonds and so on.

The advantage of buying local government bonds is to help the local economy to boost the economy, but it may also lead to arguments that some places will benefit more and some places will benefit less.

In August, the Bank of Japan's inflation index showed that the consumer price index was -0.1%. No one in the Bloomberg survey thought that the Japanese central bank could achieve 2% inflation target in six months before September 2016.

In order to re stimulate the inflation expectations of the market, Kuroda may be able to raise the inflation target and postpone the time to achieve the goal.

Morgan chase economist Masaaki Kanno believes that the Bank of Japan may be able to raise inflation target to 3%, and the date of implementation will be postponed to 2018.

BNP Paribas Securities economist Ryutaro Kono said the Bank of Japan could set long-term bond yields target to drive interest rates down.

The benchmark 10 - year Japanese government bond yield has been hovering between 0.195%-1% and 0.3% since Tuesday, when the Bank of Japan started a massive debt purchase program.