Bank of Japan’s Shirakawa Urges Policy Makers to Avoid Bubbles

BOJ Governor Masaaki Shirakawa addressed the central bankers reunion in Kansas City with a message of warning against sustained low rates. This ran counter to other Policy Makers that are urging their peers that are thinking on raising rates to do so at a lower pace.

From Reuters:

“Monetary policy should avoid accelerating a bubble through creating unfounded expectations for the continuation of low rates,” Shirakawa said at the Kansas City Federal Reserve’s annual retreat, the text of his Aug. 22 speech showed on Monday.

The comment has a sense of irony as the Bank of Japan has held the 0.1 percent rate without change since December 2008. It will be interesting to see if anybody follows Mr. Shirakawa’s advice, even the central bank he leads.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza