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Currencies  |  January 11, 2013 14:54:32

Japan: 18 years of deflation


iPoint.cz S & P: Crisis is at its end

A better balance of Commerce of China, positive comments rating agency Standard and Poor's that the debt crisis in Europe would be this year should begin to improve as well as the expectations of the less tough regulation of the banks yesterday helped the stock market to grow. Steps led the financial sector with prírastkom 1.24%. Yester cocktail stock: Dow Jones +0.60% SP500 +0.76%, Nasdaq Composite +0.51%.

Draghi: ECB The decision was unanimous

Above the euro also traded yesterday. That helped a good bond auctions by Italy and Spain, but especially the ECB president Draghi comments at a conference in Frankfurt. ECB yesterday as expected left its base interest without changing the seed, but occupied mainly businessmen of whether they are true the December administration that reducing tariffs month ago stopped Draghi, Weidmann, Asmussen and Coeur. Accordingly, one of the first journalists' questions intended specifically on whether the decision was unanimous. Draghi confirmed this, saying that it was not no request for a reduction of the rates of other central bankers. Euro to more growth and did not need fired after those words through to the surface of 1.33.

Draghi moved the team attitude of Governors, the ECB sees stabilization in financial markets as well as stabilizing the economy at low levels, which opens up the possibility of improving the economy at the end of this year. The same month the ECB Expected behold recession a year ago and were impressed by it, come on Let's hope that they are right. When you eurokrízu called officially discontinued President Barroso of the European Commission, it must be so. Asked if the ECB is considering some tools to halt superexpanzívnej monetary policy, Draghi said that above nerozmýšľajú team.

In Japan, to await further stimulus

Resume agresívnej monetary policy intends to contrast the Japanese central bank. She should acknowledge it was the meeting of 21 to 22 January, when it is expected that the volume of purchases of assets from the market will be extended by another 10 trillion yen. The aim is to initiate purchases of the economy and especially inflation.

Japan: 18 years of deflation

Indeed, Japan is in deflation for 18 years. Inflation measured deflátorom GDP is negative in the country since 1994. During this period prices fell by a cumulative 17.8%. Nuclear inflation is negative for 15 years, reaching an average of -0.4%, while in the UK and the U.S. reached 1.6% respectively. 2.1%. Agency Standard and Poor's points out that they think deflation is very dangerous for fiscal position and literally indicate deflation, and the budget deficit for the two sides of the same coin. Construed accordingly aggressive monetary policy as a tool provoke deflation. According to them, but the central bank and thus far nerobila quite literally say that the BoJ threw towel into the ring, before it entered into him before. Therefore, remain very skeptical about inflation targeting, changes in the level of 1% to 2%.Once the last year, the BoJ could halt deflation, despite efforts to the maximum, as it can now? They believe is that the BoJ credibility in fighting inflation was badly damaged in the minds of economic agents deflation is already rooted so seriously that their removal would be necessary steps are carried out practically possible. Fighting deflation so while the central bank as well as government loses too and also do not believe that it will manage to boot up inflation.

View on today

ECB President Draghi yesterday offered a relatively positive picture of the situation in the euro area. Devoted mainly to the fact how to improve the situation on the financial markets, and basically announced victory over crisis. In his words responded euro strong growth. In the economic area voiceless again negative, which was also good governance.The economy was expressed that they are stabilized at a low level and expects gradual improvement in the second semester. These messages were sufficient to ensure that the euro pushed back the resistance of 1.33. And now here we wait for further management. Today the market has offered good auction of Italian bonds and yields on 2 year olds dlhopisoch are falling to the level of 2010, which is very positive. Makrokalendár will offer today from U.S. commercial flax Balance for November, but not the data, which would be today had to determine market sentiment. Today we see, therefore, depend more on trade movement shares. But we see, a possible pullback absorbing the purchase. The reason is pondelňajší Bernanke's speech in Michigan. There will be discussing the "monetary policy, the reconstruction of the global financial crisis and the long-term Challenges for the U.S. economy."We anticipate that this speech will seek to reduce the importance of the recent FOMC Minutes and say that the Fed is still ready to help the U.S. economy.

Stock index SP500

Author: John Benaki | TRIM Broker, as | Trading on exchanges TRIM Broker


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