Unprecedented Easing Ahead for Japan

Haruhiko Kuroda yesterday followed in the footsteps of Ben S. Bernanke and Mario Draghi as he swung the Bank of Japan (8301) from incremental moves to unprecedented stimulus in his first policy meeting as governor.

The BOJ will double the monetary base by the end of 2014 through buying government bonds, the central bank said in Tokyo, in Japan’s biggest round of quantitative easing. JPMorgan Chase & Co. said the Japanese and U.S. central banks are now “in the same camp” when it comes to monetary stimulus.

With the Federal Reserve, the European Central Bank and the BOJ now pulling in the same direction, the risk for Kuroda is that taking an activist role may fuel expectations for more measures that he won’t be able to live up to. Ten-year bond yields fell to a record yesterday, the yen plunged by the most in 1 1/2 years against the dollar and stocks surged, as investors expect Kuroda to revive an economy where prices are back at 1992 levels.


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