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Realistbear

Times: I R Woes To Continue With More Hikes Indicated By B O J

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http://business.timesonline.co.uk/article/...2270366,00.html

imes Online July 14, 2006

Japan raises rates and hints of more to come

From Leo Lewis in Tokyo

The Bank of Japan yesterday broke free from its six-year experiment with zero-interest rates and entered the first monetary tightening cycle the country has experienced since 1989.
The BoJ made its historic decision to raise rates from near zero with the confidence that the country’s 10-year struggle with deflation is now behind it.
The central bank accompanied the 25-basis point rate rise with an upgrade in the wording of its economic assessment. The BoJ described Japan’s economy as "expanding" for the first time in 14 years.
The cost of servicing its government debt debt – its borrowings amount to 150% of gross domestic product – immediately rose to around yen 2 trillion (pounds 10 billion) per year.
The decision marks a sharp acceleration of Japan’s bid to "normalise" its economy – just five months ago, the BoJ said that it was in "no hurry" to change monetary policy.
Many analysts pointed out that the BoJ’s verbal guidelines now bore little or no correlation with its policy actions.

:o

Edited by Realistbear

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http://business.timesonline.co.uk/article/...2270366,00.html

imes Online July 14, 2006

Japan raises rates and hints of more to come

From Leo Lewis in Tokyo

The Bank of Japan yesterday broke free from its six-year experiment with zero-interest rates and entered the first monetary tightening cycle the country has experienced since 1989.
The BoJ made its historic decision to raise rates from near zero with the confidence that the country’s 10-year struggle with deflation is now behind it.
The central bank accompanied the 25-basis point rate rise with an upgrade in the wording of its economic assessment. The BoJ described Japan’s economy as "expanding" for the first time in 14 years.
The cost of servicing its government debt debt – its borrowings amount to 150% of gross domestic product – immediately rose to around yen 2 trillion (pounds 10 billion) per year.
The decision marks a sharp acceleration of Japan’s bid to "normalise" its economy – just five months ago, the BoJ said that it was in "no hurry" to change monetary policy.
Many analysts pointed out that the BoJ’s verbal guidelines now bore little or no correlation with its policy actions.

:o

I have read they are thinking quarter point rises evry quarter of the year.. are you saying it could be more more frequent then that RB? what makes you suggest that?

Markets thought in February that they may increase.. to me this is a late increase which was expected to start in Feb/Mar.

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Bottom line is that more and more central banks are raising interest rates and "mopping up excess liquidity". Not at all good for anyone with huge debts at variable rates or owners of any asset (eg houses) normally purchased via borrowing (since with higher rates, borrowers can afford to borrow less and therefore pay less - prices fall).

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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