|Might things be different for Japan this time?|
Spain’s Prime Minister does not need another headache but with pretty well all the votes counted from Sunday’s election in Catalonia, the four parties that favour holding a referendum on independence from Spain have won nearly two-thirds of the parliamentary seats. That said, the Catalan President has not been given the mandate to lead such a drive in view of the seats lost by his party to other parties. Also any attempt to carry through with a referendum will be challenged as unconstitutional by the Spanish Government. Thus far, the reaction has been very marginal in the bond market.
Later today, the Eurogroup of finance ministers will reconvene to approve the conditions for another loan to Greece. The sticking point is still whether Greece is able to reach a sustainable debt position by 2020. According to Reuters, a conference call this past Saturday in preparation for today’s meeting managed to conclude with a common position among finance ministers in an effort to reach a conclusion today.
Back to Japan where Mr Abe wants to go all out to rid the economy of its deflationary malaise. To that end he is proposing that the central bank adopt a policy of ‘unlimited easing’ until inflation reaches 3 percent. The idea has been rejected as ‘unrealistic and negative for the economy’ by the Governor of the Bank of Japan (BoJ), but that won’t stop Abe. Although he has modified his proposal, he still intends that policy be directed towards unlimited easing with the aim of achieving inflation of between two and three percent. More >