Japan: Uncertain on the economic policy front

- Uncertain on the economic policy front
• "With increasing concerns about the global economy and the recent sharp yen appreciation, the government and the Bank of Japan are facing growing calls to eploy additional fiscal and monetary stimulus."
• "On the monetary policy front, an expansion of the BoJ's new funds-supplying operation (introduced in December 2009) looks likely to be announced either at an emergency meeting (if financial markets remain volatile) or at the central bank's next scheduled Monetary Policy Meeting on 6-7 September."
• "Fiscal stimulus efforts appear likely to center around measures aimed at fueling demand and boosting employment levels. That said, much could change depending on the outcome of the DPJ's 14 September internal election for party president."
• "Recent media reports suggest that the package currently under consideration offers nothing new from a policy perspective and would in any case involve only a relatively small increase in fiscal spending."
- Slowdown in trades
• "Seasonally adjusted trade surplus rose for the second consecutive month in July. However, this was mainly due to a larger decline in imports than in exports."
- Demand for bank loans remains weak
• "Money stock in July indicates weak demand for funds and less risk appetite among investors"

CreditSuisse Japan Economics Weekly 20100826

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