Last month, the Bank of Japan kept its monetary policy unchanged following stimulus measures in September and October. It said it expects the economy to remain “relatively weak” amid “a high degree of uncertainty.”
Abe also wants to increase stimulus spending — including on infrastructure projects, CNNMoney reports.
“But the real target of more monetary stimulus is not guaranteed. The central bank could refuse or ignore Abe’s calls for action,” it added. “Should the central bank complicate his plans, Abe will be left with little room for maneuvering. Japan’s government is the most indebted major country in the world, and faces tough budget decisions on a regular basis.”
Bond guru Jeff Gundlach recently said one of his high-conviction investing ideas is to buy Japanese stocks and short the yen. “In Gundlach’s view the Japanese government is out of options, and is therefore going to start debasing the yen in order to stimulate growth. As this happens we should see the yen weaken and the Japanese stock market rally,” reports David Waring at Learn Bonds.
CurrencyShares Japanese Yen
