The Bank Of Japan Launches Negative Interest Rates As Soon As Possible To Get Out Of Deflation.

The Japanese central bank may have to act again if Japan's economy is weak.

Although Andouble economics has been implemented for more than three years, Japan is still unable to get rid of the cycle of expansion and recession. Japan's economic contraction in the four quarter.

According to the data released by the Japanese Cabinet Office in February 15th, Japan's GDP fell by 1.4% in the four quarter.

Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance, said there was nothing to support Japan's economy at the moment, Yasuda Kodama said.

Although Japan's Cabinet Office announced the 15 quarter of Japan's economic contraction in the four quarter of this month, the Nikkei 225 index closed up 7.2% on that day.

Goldman Sachs believes the central bank will still face great resistance in March when it expects the Bank of Japan to further ease its monetary policy in mid March.

Implementation in January

The policy has hindered the implementation of its additional loose monetary policy, and most importantly, it has a great negative impact on politics.

When Abe Shinzo came into power in late 2012, he implemented a series of economic stimulus policies, known as "Andouble economics".

Andouble's economic stimulus plan has three arrows, namely, flexible fiscal policy, bold financial easing policy and attracting private investment as the goal.

Although the Bank of Japan has done its duty in reducing interest rates and buying bonds, the other two areas of Andouble economics are still disappointing.

December Japan core

Year on year increase of 0.1%, inflation is still low, dangerous approach to deflation.

According to the data released by the cabinet of Japan in February 15th, the proportion of personal consumption that accounts for 60% of GDP in the fourth quarter of last year was 0.8% lower than that in the third quarter, which has significantly shrunk compared with the third quarter.

As wages and bonuses grew sluggish and the consumption tax rose by 3% in 2014, Japanese consumers were holding their pockets.

Since the beginning of this year,

The US dollar has risen by 5.6%, and the appreciation of the yen is eroding the profits of export enterprises.

In January 29th, the Bank of Japan unexpectedly announced the introduction of negative interest rates. The deposit rate of some excess reserve deposits held by financial institutions in the BoJ fell from 0.1% to -0.1%, and began in February 16th.

The Bank of Japan launched a negative interest rate in order to prevent financial market turmoil from hitting business confidence and to step out of deflation as soon as possible.

Wall Street knowledge once mentioned, Kuroda Higashihiko said in congressional testimony on February 3rd, negative interest rate policy does not indicate that we have reached the limit of treasury bonds purchase, if necessary, we will further reduce the interest rate which has fallen to negative value.

There are no restrictions on monetary easing.

In addition, Kuroda Higashihiko issued a semi annual report to the Japanese parliament yesterday, saying that as long as necessary, the Bank of Japan will continue to implement QQE and negative interest rates to achieve the goal of price stability.