How the Bank of Japan staged its big bang

"How the Bank of Japan staged its big bang"

Article Summary:
Original Article by Leika Kihara of Reuters

Bank of Japan Governor Haruhiko Kuroda has a radical recipe: double Japan's money supply in two years, and promise to ignite 2 percent inflation in two years, reversing nearly two decades of falling prices, Kihara explains. After Kuroda received a 9-0 vote of approval, financial markets were left in shock.. The impact was exactly according to script. The yen went into a precipitous slide, Tokyo stocks extended a five-month rally, and government-bond yields fell to record lows, Kihara explains.

"The dramatic vote swing highlighted both the power of Kuroda's nerdy charisma and the influence of a group of senior BOJ officials who had agitated behind the scenes for a more aggressive policy for months. It is far too early to know whether Kuroda will conquer deflation, but the story of how he won his first battle suggests the new governor has galvanized internal support for the long fight ahead. This account is based on interviews with more than a dozen central bank insiders before, during and after Kuroda's first days at the central bank."

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