Fiscal Stimulus the Next Step for Japan

Japanese policymakers are starting to see fiscal stimulus as the most likely next step to spark economic growth given the central bank’s dwindling monetary ammunition and uncertainty over the agenda of U.S. president-elect Donald Trump.

The market turbulence caused by Trump’s victory has unnerved policymakers, and offers an opportunity for lawmakers favoring bigger fiscal spending to press their case, with another supplementary budget for this year a possible first step.

And the Bank of Japan’s new monetary policy target of keeping the 10-year government bond yield near zero percent presents an opportunity to lock in long-term borrowing with virtually no interest cost to fund spending plans.


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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.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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