Breakingviews

Bank of Japan’s boldness risks diminishing returns

April 25, 2016

Inflation and growth remain moribund despite epic bond-buying and subzero interest rates. One bold move would be for the central bank to step up purchases of exchange-traded funds. That would lift shares and maybe help confidence - but wouldn’t change corporate behaviour much.

Singapore joins global battle against deflation

April 14, 2016

The city-state has problems others would love to have, including a budget surplus and low unemployment. But falling prices and exposure to weak global trade are a concern. That’s why the monetary authority has unexpectedly eased policy by pledging to keep the currency stable.

Stronger yen heightens pressure on Bank of Japan

April 8, 2016

One U.S. dollar now buys less than 109 yen, versus 120 at the start of the year. That is bad news for corporate earnings, inflation, and state finances. Direct intervention would be unpopular abroad. The central bank, already deep in experimental territory, may need to do more.

Draghi pulls a risky rabbit out of his hat

March 10, 2016

The ECB chief cut rates, said non-bank corporate bonds could qualify for a larger asset buying programme, and flagged new long-term loans. The good news is Mario Draghi is willing to go the extra mile. The bad: he may encourage excessive risk-taking without lifting inflation.

India needs its central bank chief a bit longer

March 8, 2016

Raghuram Rajan’s three-year term as governor of the Reserve Bank of India ends in September. Inflation has almost halved under his watch. Yet Rajan’s campaign to clean up banks’ bad debts is far from complete. Confidence will take a hit if he isn’t around to finish the job.

Bank of Japan’s new currency salvo could backfire

January 29, 2016

The central bank has responded to turmoil in global financial markets by cutting interest rates below zero. The shock move weakens the yen and opens a new front in Japan’s battle against deflation. But it also risks adding to the international tumult that prompted the BOJ to act.

India GDP growth is one-third statistical illusion

June 5, 2015

Official data have become utterly unreliable. A Breakingviews analysis of corporate and consumer behaviour suggests growth is now closer to 5 percent than the 7.5 percent claimed by the authorities. Investors are quite right to be upset by half-hearted monetary easing.

China’s new monetary tool: quantitative teasing

May 11, 2015

Cutting interest rates, as the central bank just did, can ease pressure on some borrowers, but won’t do much more. Making money more abundant, rather than just cheaper, would be a more decisive move. For now the government is wisely keeping its powder dry.

Japan index: BOJ plays a risky waiting game

April 8, 2015

The Bank of Japan refused to heed growing calls to further ease its ultra-loose monetary policy. Inaction could be risky. Stock prices are the lone bright spot in a gloomy Breakingviews Abenomics Index reading for February. A return of deflation could hurt the BOJ’s credibility.

Guest view: The RBI does need its wings clipped

April 2, 2015

The Reserve Bank of India’s repressive influence is stunting the growth of finance. Governor Raghuram Rajan is fighting attempts to shrink the RBI’s role because of pushback from his officers, says Percy Mistry, author of a 2007 report on making Mumbai a global financial centre.