Years of heavy money printing by the Bank of Japan has made the bond market dysfunctional and fiscal policy heavily dependent on cheap money offered by the bank, a former BOJ deputy governor said, warning against expanding monetary stimulus further.
Toshiro Muto, who retains strong influence among policymakers, also said it would be hard for Japan to intervene in the currency market to stem yen gains unless the currency strengthens well below 100 to the dollar.
The yen stood around 104 to the dollar on Wednesday.
Oil and Earnings Eyed as Stocks Remain Vulnerable
USD/JPY – Yen Unchanged as Japanese Inflation Edges Upwards
EUR/USD – Euro Pushes Above 1.09 Despite Soft German Consumer Confidence
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.