Importantly, the drop in bond yields in the U.S. and Germany, and the already-low government bond yields in Japan, suggest the monetary policies of the U.S. Federal Reserve, the European Central Bank and the Bank of Japan will remain aggressively stimulatory for at least the next several months, if not longer.
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system.
The U.S. Federal Reserve is debasing the dollar, and, in lockstep, the European Central Bank and the Bank of Japan are doing the same to the euro and the yen, respectively.
The unexpected collective move by the U.S. Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank were bullish for risk assets as the U.S. and European stock markets, and most commodity markets, rallied on the news.
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The policies have seen Japan's central bank, the Bank of Japan, double its inflation target to 2% in attempt to spur domestic consumption.
The moves by the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and other central banks of the world serve notice that they are in unison on making sure the European Union debt crisis does not spread into a worldwide financial contagion.
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During his campaign he had even suggested that the central bank, the Bank of Japan, should print "unlimited yen" to help stoke consumer price growth.
Now that the U.S. Federal Reserve, the European Central Bank, and the Bank of Japan have all introduced measures to help their respective economies, investors are looking elsewhere for new cues.
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Meanwhile, Japan's central bank, the Bank of Japan (BOJ) left its interest rates unchanged at between zero to 0.1%.
Japan's central bank, the Bank of Japan, is already under pressure from new Prime Minister Shinzo Abe to take steps aimed at tackling deflation.
In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
We can be thankful that the European Central Bank and the Bank of Japan are resistingthe temptation to follow our currency debasement with their own.
The main reason for this is that the Bank of Japan, the central bank of a country with a habit of setting economic records of all the wrong sorts, has intervened more heavily in currency markets than any country has ever done before to slow the yen's rise.
The culprit is the Federal Reserve, which has been printing money at an inflationary pace and at a faster clip than the Bank of England, the Bank of Japan or the European Central Bank.
"The biggest risk for the current bull market is a policy mistake by the Fed, or the European Central Bank, or the Bank of Japan, or the European Union, and we got a good sneak preview of that with Cyprus, " said Burt White, chief investment officer at LPL Financial in Boston.
The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick with low interest rates and quantitative easing programmes at meetings this week.
But the rise was deeply exaggerated by the Fed's inflation, which was reinforced by the excess monetary creation by the European Central Bank, the Bank of England and the Bank of Japan.
The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick to ultra-easy monetary policy at meetings this week, following on from reassurances by U.S. Federal Reserve officials that their stimulus program remains in place.
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Most serious of all, unlike other central banks, the Bank of Japan cannot cut interest rates further, because they are already close to zero.
The boost came from expectations and then further monetary easing from the U.S. Federal Reserve, as well as plans by the European Central Bank and Bank of Japan to buy more bonds.
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Critics might fret that the recent slowdown in the growth in Japan's monetary base (banks' reserves at the central bank plus notes and coins in circulation) suggests that the Bank of Japan has tightened policy.
The end of the Bank of Japan's latest meeting marked the start of a busy day for central banks, with the European Central Bank and the Bank of England both scheduled to announce their policy decisions later Thursday.
At the same time, the Federal Reserve and the Bank of Japan have led global central banks in flooding the market with liquidity, forcing investors into riskier assets such as stocks.
The end of the Bank of Japan's latest meeting will mark the start of a busy day for central banks, with the European Central Bank and the Bank of England both scheduled to announce their policy decisions later Thursday.
Now the tables are turned: markets are worried that the Fed will stop at 5%, but the European Central Bank is raising interest rates and will probably soon be joined by the Bank of Japan.
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Since then many developing countries such as the Philippines, China and Colombia, as well as developed nations of Japan, the European Central Bank, the U.S. and the U.K. have joined forces in a world-wide synchronized stimulation of the economy.
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Unlike the Europeans, whose central bank is run by Germans with a residue of financial integrity, the Fed followed the Bank of Japan.
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The European Central Bank (ECB) has some scope to ease the blow by cutting interest rates but the Bank of Japan has already cut them as low as they can go.
By joining the U.S. Federal Reserve and other major central banks in flooding the economy with cash, the Bank of Japan hopes to get corporations and consumers to begin spending more and end a long malaise.
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