The Bank of Japan has made a economic projection that has at least a bit of cautious optimism. While it is not declaring the recession entirely over, the BOJ kept rates at 0.10% and has extended added liquidity measures through December. Technically, there was a downgrade of the outlook of the 2009 economy. But the hint of a recovery is close.
What is interesting is that the BOJ is essentially calling for a recovery, but it is keeping the trump cards handy just in case. In the address, the BOJ said the economy is heading for a recovery. But the BOJ wants to examine whether this trend will continue after three months.
What the BOJ is really telling you is that this is still a notion of “Less-Bad” ahead. It might not even be cautious optimism. It might be hopeful pessimism.
It used to be that America made fun of the near-zero rates that the Japanese government pays for its bonds. But look at our own Fed Funds rate.
Jon C. Ogg
July 15, 2009
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