First the Bank of Japan governor hinted to the end of this program at a G7 meeting, but now Japanese politicians are debating the wisdom of ending the program. The Central Bank has autonomy, but it requires certain support from the government. The new government seems to carry on the tradition of the old government to dismiss facts and figures from the BoJ and does not agree on the timeline to the recovery.
THE Bank of Japan’s policy board is likely, though not certain, to take its first small step today towards policy normalisation by confirming it will cease outright purchases of commercial paper and corporate bonds in December.
The decision ought to be straightforward because demand for this support has faded into insignificance since mid-year, as markets for raising corporate debt and equity have recovered to something approaching normalcy.
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