The Japanese stockmarket has been a major disappointment this year. The adoption of negative interest rate policy by the Bank of Japan in January was supposed to have led to further yen depreciation and sparked a recovering in corporate borrowings.
Instead, the currency has strengthened by 16% against the US dollar and a pall of deflationary gloom has once again taken root in the country. It is not surprising then, that Japanese equities are one of the worst performing stock markets this year, with the Topix down almost 13% in yen terms. So what should we make of the Bank of Japan's most recent tweaks to its QQE policies? While there are questions over whether it can successfully control the yield curve, attempting to steepen the yield curve helps alleviate pressure on the beleaguered banking system. Banks will now hopefully ...
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