Tuesday, February 12, 2013

Japan’s Economic Minister Wants Nikkei to Surge to 13,000

YOKOHAMA – Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March.

“It will be important to show our mettle and see the Nikkei reach the 13,000 mark by the end of the fiscal year (March 31),” Amari said in a speech. “We want to continue taking (new) steps to help stock prices rise” further, Amari stressed..

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Comment:

This is indeed absurd. It seemed that the minister is more concerned about the stock market than real economic growth in Japan. Here is a good commentary on the news by Mike Shedlock:

Yet, I do not pretend to know whether or not the Nikkei will soar another 17% by March. However, I do know that it is economically foolish for politicians to hijack currencies and stock markets. Thus, my positioning is certainly not an endorsement of Japanese policy.

At some point, and perhaps we have crossed the point already, currency wars can and will get out of control. If and when that happens, the Yen will spiral downward out of control, with energy prices (in Yen) skyrocketing. Moreover, Japanese exports may not necessarily rise as everyone believes.

Sentiment is a powerful thing. Convincing everyone in Japan that a huge outburst of inflation is on the way, is not the brightest thing to do, to say the least. As I have stated many times, Japan better be careful or it may get (and then some in spades) more of what it seeks.


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