On Wed, Mar 20, 2002 at 03:15:35PM -0500, pms wrote:
> What does Rubin actually want them to do to achieve this inflation target,
> and what effect does it have on people's lives? Anyone?
>
>
>
> Japan's gold imports surge 7-fold
> BOJ stands pat; Rubin urges BOJ to set inflation target
> By Bill Clifford, CBS.MarketWatch.com
> Last Update: 7:39 AM ET March 20, 2002
>
>
>
>
> TOKYO (CBS.MW) -- An interesting nugget in Japan's latest trade data. And an
> interesting nudge from former U.S. Treasury Secretary Robert Rubin.
>
> The nugget: Japanese investors imported 19,754 kilograms of gold in
> February, up a stunning 662 percent from the same month last year, according
> to the government's trade report Wednesday.
>
> This month, says Itsuo Toshima, regional director of the World Gold Council,
> gold buying in Japan "has slowed, although (is) still double to triple
> year-to-year in March."
>
> Toshima says the recent Tokyo stock market rally has lent "a sense of
> temporary relief." The Nikkei Average fell 2.3 percent Wednesday. See Asia
> Markets.
>
> The surge in gold imports "can be attributed to the Bank of Japan's
> aggressive monetization of government debt, which, if left unchecked, will
> result in the elimination of deflation and the start of inflation," said Ken
> Landon, currency strategist at Deutsche Bank in Tokyo.
>
> "Japanese citizens are clearly losing confidence in the monetary policy of
> the BOJ and are buying gold to protect against a potential meltdown in the
> value of the yen," he said.
>
>
>
> Foreign exchange trading was quiet, with the Japanese currency trading in a
> tight range, between 132 yen and 132.42 yen against the dollar. The yen
> (C_JPY: news, chart, profile) has weakened sharply from its recent March 7
> high, when the dollar bought just 126.36 yen. Now, each dollar buys more
> yen -- 132.22 yen at the end of the trading day, a bit shy of the 50-day
> moving average at 132.56.
>
> The BOJ's nine-member policy board decided by majority vote to keep monetary
> policy unchanged. Wrapping up a two-day meeting Wednesday, the central
> bank's board left its target of commercial bank overnight deposits in a 10
> trillion yen to 15 trillion yen range. The BOJ also kept its monthly
> outright purchases of Japanese government bonds at 1 trillion yen ($7.57
> billion).
>
> After the vote, Robert Rubin, who is visiting Tokyo in his capacity as
> chairman of the executive committee of Citigroup (C: news, chart, profile),
> told Japanese Prime Minster Junichiro Koizumi the central bank should set an
> inflation target.
>
> Koizumi in turn appealed for U.S. understanding of the central bank's
> attempt to boost prices through its credit-easing policy, Liberal Democratic
> Party Secretary General Taku Yamasaki told reporters, according to Kyodo
> News. Yamasaki had also attended the meeting.
>
> Yamasaki said Koizumi is sticking to his policy of holding new bond issues
> to 30 trillion yen annually, from the fiscal year beginning April 1.
>
> According to the Kyodo report, Rubin told Koizumi that interest rates on
> long-term bonds could rise excessively if Japan were to issue new government
> bonds without such a limit.
>
> Bill Clifford is Asia bureau chief of CBS.MarketWatch.com.
>
>
>
-- Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu