forex USD/JPY: The Impact of Japan’s Financial Stimulus

[Anzo Lim 0]

https://jump.wikifx.com/83348CF26389B46D

Investors may worry that Japan’s fiscal stimulus will stir up the securities market, but the Japanese government apparently knows what its doing in financing. The Japanese Ministry of Finance has been conducting such massive refinancing scheme in recent years that it is 52 trillion yen (US$480 billion) above the required level in this fiscal year, which can greatly ease apprehension arose from the 26-trillion-yen stimulus plan announced by Shinzo Abe last week.

 

Although Japan will not stop refinancing matured bonds, leveraging the part of fund collected through bonds will allow the Japanese government to better plan the bond- issuing during stimulus scheme to avoid bad timing on the market. However, the Japanese government has not made clear how it will finance the extra budget. "From the perspective of debt management and effective use of treasury funds, it is reasonable to prevent the increase in market issuance through refinancing bonds," said Naomi Muguruma, senior market economist at Mitsubishi UF Morgan Stanley Securities.

 

USD/JPY daily pivot points: 108.56

 

S1: 108.43                     R1: 108.69

 

S2: 108.31                     R2: 108.81

Edited December 10, 2019 by Anzo Lim