News Headline Summary

Japan opposition LDP leader Abe says BoJ must pursue bold monetary easing, government and BoJ can discuss a new inflation target

Says:

- BoJ must set 2% inflation target, its current goal of 1% is not enough
- BoJ is not taking responsibility for real economy.
- BoJ has independence from government in goal setting, unlike other central banks which set goal with government.
- BoJ should be held responsible to achieve not just price stability but job growth.
- Bold monetary easing by BoJ will undoubtedly correct strong JPY.
- Easing needs 2-3 years to create inflation expectations.
- Fiscal spending via public works must accompany monetary easing to pull Japan out of deflation.
- Japan cannot restore fiscal health while in deflation as tax revenue won't rise.
- Sharing inflation target with BoJ wouldn't undermine BoJ independence.
- His policies not only factor behind recent weaker JPY and stock rise.

Reaction details (13:02)

- USD/JPY rose 20 pips from 81.98 to 82.18 in the 6 minutes after the initial headline.
- Nikkei 225 rose 0.3% in the same time frame, rising from 9408 to 9436.

Analysis details (13:03)

- Comments out of Abe recently has been a real mover for the JPY given his aggressive monetary easing stance.

27 Nov 2012 - 12:49 - Forex - Source: Newswires

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