It Will Take A While For Japan To Act.

In 2016, what will be the policy of the Bank of Japan? According to the statement made by the BoJ's latest resolution in December and the economic development situation, the Bank of Japan has no immediate plan for easing it.

At present, Japanese banks will act only if "overseas demand is damaged by market confidence and hinder enterprises from increasing investment and raising wages".

The Bank of Japan (BOC) decided to maintain its current interest rate at the December 18th interest rate conference, while maintaining an annual increase of 80 trillion yen (US $655 billion).

The decision to increase the purchase of exchange traded funds is an unexpected move.

At present, the exchange traded fund (ETF) purchased by Japanese bank every year is 300 billion yen (US $2 billion 450 million), which is mainly composed of stocks issued by investment real and human capital companies. ETF

The new ETF purchase plan is a supplement to the existing plan (annual purchase of ETF 3 trillion yen).

The bank realized that the huge purchase of ETF had triggered a sharp decline in the liquidity of the Japanese bond market, and decided to extend the maturity of its bonds.

Kuroda Higashihiko, the governor of the Bank of Japan, said that this is not an additional easing policy. It is a supplement to the current QQE (quantitative and qualitative easing) policy. The main objective is to encourage companies to raise wages and investment.

"Many companies invest heavily in capital expenditure and human resources. We hope that more companies can join us," the bank chief said in the latest announcement.

From this standpoint, the new measures are complementary to the policy of easing. "

Japan Bank believes that the economy is back on track.

Kuroda expressed optimism about the revival of Japan at a news conference after the December 18th meeting.

The third quarter GDP data also strengthened the optimism of Japanese bank.

In the third quarter, GDP's data showed that Japan's economy dropped by 0.8% in the third quarter.

The recent growth in machinery orders and industrial output data in October has raised Japan's hopes for the fourth quarter's economic recovery and potential inflation has begun to increase.

On the optimistic side, Kuroda said, "we have not seen the threat or price increase or increase."

He believes that the slowdown in the emerging economies has not seriously affected the Japanese economy, and believes that the acceleration of emerging economies will not pose a threat to the achievement of price targets.

Kuroda believes that the effect of easing policy is emerging.

"Businesses and families have changed expectations of deflation."

He said he would try to "expand all positive factors".

The bank said the current economic development, but reiterated that the easing policy would not stop until the inflation target reached 2%.

Japan Bank said it would continue to observe the market's favorable or unfavorable factors for economic activities and prices, and make necessary adjustments if necessary.

The radical easing policy supported by Andouble economics has so far failed to achieve its intended purpose.

Japan Bank has delayed the expected time to achieve inflation target.

At the October meeting, the expected time for Japanese silver to achieve its inflation target was set in the second half of fiscal year 2016.

Inflation expectations in the fiscal year dropped to 0.1%, and in fiscal year 2016, it was expected to fall to 1.6%.

Sustained low inflation will always encourage more stimulus measures to achieve 2% inflation target.

The target of economic growth in the 2015 fiscal year has dropped to 1.2%, and has fallen to 1.4% in fiscal 2016.

From April 1, 2017, Japan will increase business tax, which should seriously damage the economic growth of Japan in 2017.

The Japanese government may choose to increase its budget by more than 3 trillion to stimulate the economy.

At present, Japanese banks will act only if "overseas demand is damaged by market confidence and hinder enterprises from increasing investment and raising wages".

Kuroda believes there is no need to cut interest rates again and enter the era of negative interest rates.

He believes that the Japanese bank's asset purchase plan has made Japan's borrowing costs very low.

Kuroda said, "our easing policy has had a positive impact on the economic and financial markets, and banks have begun to increase loans to the real economy, and the adjustment of capital portfolios has begun."

Hetian believes that with the help of developed economies, emerging markets will gradually get out of the doldrums.

This will help Japan restore exports.

He also believes that there will be a big increase in Japanese capital investment.

Because of Japan's confidence in restoring the economy, there is little chance of a cut in January 2016.

The current situation does not require more economic stimulus.

Nomura analysts believe that by April 2016, Japan will have a new economic stimulus plan.

But Tokuda Hidenobu, a senior economist at Mizuho Research Institute, believes that the Bank of Japan will expand its lenient as early as January 2016, because "now the rate of wage growth can not reach the target of Japanese bank inflation". (Hidenobu)

The revised third quarter GDP shows that Japan is trying to avoid a technical recession. In the third quarter, the initial GDP value once showed that the economy had shrunk, but after that it was revised to an annual growth rate of 1%, mainly due to the increase in capital expenditure.

But now is not the time to relax.

If the Japanese economy wants to grow at 1.5% in the current fiscal year (end of April 1, 2015 -2016), then the remaining two quarter data will grow by 3% annually in each quarter.

Kari Aki, the chancellor of the exchequer, said such GDP goals were too ambitious.

The reduction in export and household consumption this quarter may drag down economic growth.

Growth in the fourth quarter is likely to be moderate.

In October, Japan's main consumer prices fell for third consecutive months, household consumption also declined at the same time: the CPI rate decreased by 0.1% in October, and there was a decline in oil prices. In October, household consumption decreased by 2.4% in October, and the median market value was expected to rise by 0.1%.

The decline in household consumption is mainly due to the lack of wage growth.

But Japan's unemployment rate dropped from 3.4% in September to 3.1% in October.

The latest data make the market doubt whether the bank will be able to achieve expected inflation in 2017.

Analysts believe that crude oil prices may force Bank of Japan to lower its inflation expectations in January 2016.