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Main » 2016 » April » 15 » Japan. Lessons for all other
Japan. Lessons for all other

Almost all central banks are wondering - whether artificially low interest rates to stimulate bank lending and keep the economy forward - for AMarkets materials.




This question remains open. However, most of the Central Bank did not doubt that they can easily rely on the "rebalancing of portfolios," investors. This will be a short-term measure, which resulted in investors actively buy stocks and sell government bonds. Those. shifted in instruments with greater risk. However, this measure provides a short-term "hot" effect, and it's better than nothing.

The more the central bank allows its rate to move away from other interest rates of the Central Bank, the greater is the impact on the foreign exchange rate. The more the Central Bank loosens monetary "reins", the more devalued the country's currency - something like this written in the classical textbooks of economic theory. After entering the zone of negative interest rates, the yen nevertheless grew more than fell. This can only mean that the effect of the interest rate has its limitations.

Japan is at the heart of its economic policy put "three arrows" - monetary easing, government spending and business deregulation. The first two components do not work without the third - this is the main lesson to be learned from the Japanese experience. The private sector should be comfortable to work and earn - without this condition in any way. But perhaps even more significant conclusion - central banks are becoming less effective.Currencies whose "fortress" is held on the debt - unstable currency. They can not count on the long term.


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