For the first time since June 2012 Japan has attained a trade surplus. It is, however, premature to interpret that as an end to the impoverishment the island has undertaken these past three years, the last two under QQE. There are various reasons for the end of the negative trade imbalance, but the most significant surround the Chinese New Year. [...]
Japan has faded from the front page, but the economic disaster continues to bother. The Bank of Japan has been forced back from its first target “against” the “deflationary mindset” that launched QQE back in April 2013. The goal then was not to achieve 2% “inflation”, but rather a stable and sustained 2% rate. Needless to say, oil prices are [...]
The good news in Japan for August trade figures is that imports fell 1.5% Y/Y, but that was balanced by an almost identical 1.3% Y/Y decline in exports. Confounding all orthodox expectations, the yen’s radical devaluation did nothing to press divergence between imports and exports as it was “supposed” to. Instead, imports matched exports, at best, and where it counted [...]
As I noted yesterday with US housing construction, there has been a very unusual amount of emphasis added to the month-to-month changes of various indications. Maybe that is no more than normal, but it seems as if the confidence displayed in the minutiae has been amplified. Given the circumstances, that is both understandable and reprehensible at the same time. The [...]
I have little doubt that the most perverse aspect of orthodox economics is the idea of monetary neutrality. Taken as nothing more than an article of faith, monetary practitioners use the principle as cover to undertake drastic and blunt intrusions into markets and economies, with no guilt over having done so because they can simply invoke neutrality and proclaim some [...]
I think it is very clear that the Bank of Japan is becoming more and more sensitive to swings in the Japanese stock market. Policy pronouncements, toothless as they usually are, seem to correlate very well with downturns in stock prices. Perhaps some of the Federal Reserve literature is making its way East. There were no doubts, none whatsoever, last [...]
Persistent whispers throughout the autumn that the Bank of Japan was thinking and even planning (I suppose that meant more modeled simulations) to raise its intervention quota beyond what was judged only months ago to be monstrous and more than sufficient had an anesthetic effect on Japanese “markets.” Despite what was serious consternation about the damning resistance of Japanese companies [...]
I have been pointed toward an alternate explanation for what I described as Japan’s potential tipping point. Scott Sumner (and others) is arguing that the tremendous increase in importation of goods into Japan is a sign Abenomics is actually working. His reasons relate to the orthodox idea of a “demand shock”, ostensibly how he classifies the yen devaluation, triggering what amounts [...]
The concept of a tipping point is remarkably easy to relate in the physical world that we actually experience day-to-day. We all have intuitive sense of it owing from that concision and familiarity. In more complex systems analysis, that innate “feel” is no less applicable, particularly where it is transparent, thus making it more confounding that it goes so unnoticed [...]
QE in any language has enthralled the mainstream media and economics profession so much that what should be so simple to interpret winds up as uncritical mush. For example, in the Washington Post with Bloomberg yesterday, the “business” section had this to say about Japan’s export data release for July: “Japan’s exports jumped by the most since 2010 in July, [...]
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