- Haruhiko Kuroda, BoJ Governor
The possibility we will see no more quantitative easing from the Bank of Japan is increasing, and the Yen will not receive another strong bearish bias from the expansion of already unprecedented stimulus programme. Last week the Federal Reserve urged the BoJ should follow their example and start tapering its quantitative easing. Another reason for a stronger Yen, is the level of confidence of Japan's central bank's governor. Some can call him overconfident, but we should admire his ability to stick to the plan despite growing tensions even among his own colleagues.
This week during the ADB annual meeting in Kazakhstan the governor claimed that economists are wrong about the world's third largest economy. He thinks the impact of the recent tax hike is exaggerated by analysts, saying the effect will be contained and the economy will continue building up momentum in the third quarter. Despite the fact domestic consumption has fallen sharply since the tax hike, Kuroda remains upbeat that economy will be able to shake off the ill-effects. The economy posted a 0.7% growth in the final quarter of 2013, posting the fifth straight month of expansion.
Additionally, the Yen gained on the back of disappointing Chinese manufacturing data, as manufacturing PMI in the contraction zone boosted interest for safer assets.
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