Allied International Trading BoJ Keeps Foot on the Gas
Allied International Trading says the Bank of Japan is maintaining its plan to expand the monetary base at a rate of $677 billion a month.
According to Allied International Trading, the Bank of Japan has pledged to maintain its plans to expand the country's monetary base by up to $677 billion a year as an imminent April sales tax hike - the country's first in 17 years - threatens to squeeze households and hamper the Bank's efforts to create 2% inflation.
The Bank's governor, Haruhiko Kuroda is facing the biggest obstacle to his effort to get the Japanese economy to generate 2% inflation as the increased sales tax threatens to act as a drag on business and consumer spending at a time the economy can least afford to be held back.
The sales tax has more or less been forced on Prime Minister, Shinzo Abe as he struggles to rein in a debt burden that the IMF says will equate to some 242% of GDP by the end of 2014.
"The sales tax is set to raise to 8% from 5% and is seen but it has the potential to derail the weak but clear recovery in Japan's economic outlook," said an Allied International Trading analyst.
"Most economists expect the BoJ to increase stimulus at some point but even the dovish Governor doesn't want to run out of ammunition at the wrong time," he continued.
Japan's dependency upon stimulus to drive economic growth is increasing as the Prime Minister sets about refining the "third arrow" of his growth policy which will seek to weaken the yen further.
"Our view is that Japanese equities will continue to benefit from increases in quantitative easing in the months going forward in much the way that US equities have gained in value because of the federal Reserve's policies," concluded the Allied International Trading analyst.
About Allied International Trading:
Established in 2010, Allied International Trading manages diversified investment portfolios on behalf of institutional clients, corporate entities and sophisticated high net worth individuals.
The Allied International Trading investment process is meticulous in its attention to detail, due to our highly disciplined approach of identifying and valuing great businesses, with unrealized investment potential.
To ensure we stay ahead of the market, after careful deliberation by our analysts, we impose a strict limit on the amount of companies we expose our clients to, taking their personal risk tolerance into account. Our objective is to build a diversified investment portfolio that will deliver superior returns for our array of different investors.
According to Allied International Trading, the Bank of Japan has pledged to maintain its plans to expand the country's monetary base by up to $677 billion a year as an imminent April sales tax hike - the country's first in 17 years - threatens to squeeze households and hamper the Bank's efforts to create 2% inflation.
The Bank's governor, Haruhiko Kuroda is facing the biggest obstacle to his effort to get the Japanese economy to generate 2% inflation as the increased sales tax threatens to act as a drag on business and consumer spending at a time the economy can least afford to be held back.
The sales tax has more or less been forced on Prime Minister, Shinzo Abe as he struggles to rein in a debt burden that the IMF says will equate to some 242% of GDP by the end of 2014.
"The sales tax is set to raise to 8% from 5% and is seen but it has the potential to derail the weak but clear recovery in Japan's economic outlook," said an Allied International Trading analyst.
"Most economists expect the BoJ to increase stimulus at some point but even the dovish Governor doesn't want to run out of ammunition at the wrong time," he continued.
Japan's dependency upon stimulus to drive economic growth is increasing as the Prime Minister sets about refining the "third arrow" of his growth policy which will seek to weaken the yen further.
"Our view is that Japanese equities will continue to benefit from increases in quantitative easing in the months going forward in much the way that US equities have gained in value because of the federal Reserve's policies," concluded the Allied International Trading analyst.
About Allied International Trading:
Established in 2010, Allied International Trading manages diversified investment portfolios on behalf of institutional clients, corporate entities and sophisticated high net worth individuals.
The Allied International Trading investment process is meticulous in its attention to detail, due to our highly disciplined approach of identifying and valuing great businesses, with unrealized investment potential.
To ensure we stay ahead of the market, after careful deliberation by our analysts, we impose a strict limit on the amount of companies we expose our clients to, taking their personal risk tolerance into account. Our objective is to build a diversified investment portfolio that will deliver superior returns for our array of different investors.
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