Tuesday, February 5, 2013

(Anything Goes Series - 5) When Nikkei Is Under Pressure (Finally), Remove BOJ Governor

Why? You can see why. Yen tanks, and the Nikkei Stock index soars by over 4% in one day.

Bank of Japan Governor Shirakawa's tenure was to end in April. Instead, he said today that he would resign soon.

The results:



Two BOJ commissioners who opposed the 2% inflation target in the last policy meeting, Takehiro Sato (from Morgan Stanley where he was a managing director and chief economist) and Takahide Kiuchi (from Nomura Securities where he was the chief economist) now say they will do their utmost best to achieve that target.

If you think "WTF?" like I did, that's quite a historical, traditional mentality in Japan. During the warring days in 15th and 16th centuries, it was quite common for the soldiers and lords who were defeated to join the victorious and fight alongside the victor, to atone for the sins of the past of having dared oppose the victor. The game of "shogi", Japanese version of chess, allows the opponent's pawns that are captured to be used again, against the opponent.

Now defeated, the two commissioners will be vigorously push for the 2% inflation target that they opposed.


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