The Yen Is Still Likely To Depreciate.

The Goldman Sachs research team said on Tuesday (March 8th) that since the Japanese Central Bank announced the negative interest rate policy in January 29th, the yen has not fallen, but it has risen sharply. The reason is that the market regards this policy as a signal of the Japanese central bank, but it is too early to do much yen.

The question is whether the Bank of Japan has given up its 2% inflation target, but it has not yet seen signs of giving up, which is the key. In fact, the bank has pointed out in its latest foreign exchange strategy that the Japanese central bank's easing policy (QQE) has been implemented more effectively than the European Central Bank's quantitative easing (QE) policy. The yield of Japanese government bonds (JGB) has been extremely flat and stable, which means that Japan is rebalancing its portfolio: shifting funds from Japanese government bonds to higher risk assets (including foreign exchange); and these factors may push the yen down before the Bank of Japan further relaxed expectations.

The bank also pointed out that the quarterly investment of the Japanese government pension fund (GPIF) has started to flow to stocks and bonds outside Japan, and the main message conveyed is that although the huge number of assets flowing from Japan to Japan is not significant, it has little impact on the amount of overseas investment in Japan: from 2014 to now, the amount of investment from Japan to overseas has been rising. "GPIF"

The bank further states that this is promotion.

The underlying fundamentals of the yen rise are expected to rise to 130 against the yen in 12 months, which has not taken into account the possibility of further easing of the monetary policy of the Bank of Japan: in view of the fact that the Bank of Japan is still sticking to its 2% inflation target, it will be further relaxed.

Since then, the yield of Japanese government bonds has been very flat, making the country's investors seeking further increase in the rate of return. Therefore, the investment portfolio of the country will still be drastically adjusted.

The bank also said that the huge increase in Japan's capital outflow may not be the size of GPIF investment.

But there are more diverse reasons, which will make the Japanese central bank more comfortable after the Japanese central bank has further relaxed.

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Member of the CPPCC National Committee and vice president of the people's Bank of China, Yi Gang, 8, said that this year's monetary policy will pay more attention to flexibility and moderation. The key support departments for structural reform will be slightly more relaxed, but overall, the orientation of monetary policy has not changed.

According to Xinhua news, shortly before the meeting of G20 finance ministers and central bank governors, the people's Bank of China expressed its "monetary policy" in a "steady slightly relaxed state", which is different from the "prudent monetary policy".

The outside world is very concerned about the consistency of the two statements.

Yi Gang replied that the two were not contradictory.

Monetary policy as a aggregate policy is still sound and policy orientation has not changed.

This year, more attention should be paid to flexibility, moderation, timely and appropriate adjustment of fine-tuning. For the key support departments of structural reform, credit will be more and slightly more relaxed. For example, the people's Bank of China will vigorously support shantytowns and major water conservancy projects through mortgage supplementary loan (PSL).

But in general, the orientation of monetary policy has not changed, and is still in the range of prudent monetary policy.

"At the next stage, the PBC will continue to implement prudent monetary policy, maintain a moderate degree of flexibility, adjust the fine tune in good time, and do well in the management of aggregate demand in line with the structural reform of the supply side."

Yi Gang said.