Despite a deal between Greece and six of its Eurogroup members, the country’s future is still in doubt. China’s stock markets are having a roller coaster ride and traders are uncertain of where they will land.
Investors are now moving their focus over to Japan which, for the last two years has had a steady rally and continues to look like a safe bet. Despite doubts over whether Prime Minister Shinzo Abe could reignite Japan’s economy out of its decades-long deflationary slump, steps that were put in place seem to have brought success.
The Bank of Japan sets the monetary policy for the country and has been doing a good job of it, with Japan markets nearly doubling since the beginning of 2013 and up nearly 17 percent so far this year.
Economic Stimulus
The BOJ has taken a double edged approach to economic stimulus in what has been referred to as “Abenomics.” It initiated a massive quantitative easing program which sent the yen sharply lower and boosted interest in stocks. It then introduced a series of structural reforms which have yet to be strongly felt but such as corporate tax cuts, agricultural liberalization and deregulation of a whole range of areas including as energy, environment, and healthcare.
The Policy Board of the Bank of Japan met today at its monetary policy meeting and by an 8-1 majority vote, set a strict set of guidelines for money market operations which gives the Bank of Japan control over money market operations so that the monetary base will increase at an annual pace of about 80 trillion yen.
