Letter from resistance

04
Category: Bank of Japan   Tags: ---

The central bank and government bonds

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Governor
Masaaki Shirakawa
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Deputy Governor
Hirohide Yamaguchi
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Deputy Governor
Kiyohiko G. Nishimura
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Member of the Policy Board 
Ryuzo Miyao
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Member of the Policy Board 
Yoshihisa Morimoto
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Member of the Policy Board
Sayuri Shirai

Member of the Policy Board 
Koji Ishida

Member of the Policy Board 
Takehiro Sato
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Member of the Policy Board
Takahide Kiuchi
The Policy Board is established as the Bank's highest decision-making body. The Board determines the guideline for currency and monetary control, sets the basic principles for carrying out the Bank's operations, and oversees the fulfillment of the duties of the Bank's officers, excluding Auditors and Counsellors.
The Bank's officers are Policy Board members (including the Governor and the Deputy Governors), Auditors, Executive Directors, and Counsellors.
The number of posts given to the Bank's officers is as follows: the Governor (one), the Deputy Governors (two), the Members of the Policy Board (six), the Auditors (three or fewer), the Executive Directors (six or fewer), and the Counsellors (a few).

The central bank hates to be forced to buy "the Japanese government bonds" on the scale of 1 trillion yen(12,733,986,816.00$) .It is serious problem.
The central bank decided to fix the policy interest rate by the monetary policy meeting that opened on 11th July and 12th July unanimously.In addition, in order to evade " a series of failures to draw sufficient sell offers from financial institutions for its fund injection operations"(Hudaware),The central bank reduced 5 trillion yen from the scale of purchases of " Fixed-Rate Funds-Supplying Operation against Pooled Collateral" more than conventional situation.The central bank decided measures to increase "short-term national bond" 5 trillion yen instead.
With liquidity demand in the market declining, the central bank has faced a series of failures to draw sufficient sell offers from financial institutions for its fund injection operations.Some board members are calling for the central bank to lower its liquidity target, in line with the current state of the market.
The central bank reduced "Fixed-Rate Funds-Supplying Operation against Pooled Collateral" and purchased "short-term national bond".The central bank performed only policy of a series of failures to draw sufficient sell offers from financial institutions for its fund injection operations .It will not be the monetary easing perfectly.

As if the Japanese economy,all Japanese politicians and the Japanese national people would break our own bones,this current situation is serious. We need help. We need reform.
The central bank abolished 0.1% of a year of lower limit interest rates which the central bank set for the fund to purchase of "short-term national bond".Just after that this ,the bond purchase operation of long-term national bond with less than one year of residual period, abolished 0.1% a year of lower limit interest rates . The long-term national bond is a decision outside of the standard of the fund.
Because the Federal Reserve Board(FRB) shelved an additional monetary easing measure in Federal Open Market Committee (FOMC) of August 1, Japan can expect that the risk that further strong yen will suppress Japanese economy through business sentiment will fade away.
However, because only the central bank of Japan is too careful about an additional monetary easing measure though the additional monetary easing measure of each country is competed worldwide.The central bank should launch an additional monetary easing measure.
The amount of purchase of Exchange-Traded Fund(ETF) has only around 300 billion yen for the stock market, and pure scale expansion including the increase is necessary.If "a series of failures to draw sufficient sell offers from financial institutions for its fund injection operations"(Hudaware) will be finished, the central bank may shelve the abolition of the lower limit interest rate at the meeting on the next time.
By revival demand from an earthquake disaster, the eco-car subsidy effect ,and the capital spending of the companies,the stable domestic demand tends to make up for a weakness of the foreign demand to some extent.The Noda Administration should request decisively that the central bank should undertake of government bonds directly.
If the government performs annual expenditure without a guarantee of the yield of taxes, and if the central bank continues printing paper money for years,inflation without the moderation may happen .
But the consumption tax increase bill is going to be approved wonderfully in the House of Councilors on August 10 of this month.
At first the central bank should extend the purchase of the government bonds on the scale of 1 trillion yen and the central bank should extend the amount of purchase of Exchange-Traded Fund(ETF) on the scale of 1 trillion yen . Drastic monetary easing is necessary.Of course it is necessary that we must premeditate the infrastructure business so that the central bank should not to suffer a loss, even if the central bank buys government bonds.
I recommend the construction of the subway on the national-scale suburbs .
and I recommend the construction of "apartment houses built by the Housing Corporation" which are combined with the nursery school,the supermarket ,the bank,the post office and the branch office of the city hall, just right above the stations of the subway .

Because it is cheap to perform the infrastructure business at the time of deflation , Noda government should decide them.If land prices rise, the deflation will stop.

Because a consumption tax increase bill is disliked by the national people, if the direct buying government bonds by the central bank,and "the foundation of the annual revenue agency(Sainyucho) "are not realized, almost politicians are difficult to win the next election .Although Noda government decides to postpone "the establishment of the annual revenue agency(Sainyucho) after 2018 year,it is nonsense.
In order to realize TPP,Noda government should realize both of the direct buying government bonds by the central bank and "the foundation of the annual revenue agency(Sainyucho).
In order to realize TPP,Noda government should realize the grand coalition between Democratic Party, Liberal Democratic Party , New Komeito,and THE SUNRISE PARTY OF JAPAN .
In order to realize TPP,because they lead to the grand coalition, we need cooperation of the U.S. Government.


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I would like to hope that U.S. Government will put pressure directly to Ministry of Finance in Japan so that Ministry of Finance should not do politics work or media work with the National Tax Agency, because Ministry of Finance wants to prevent"the foundation of the annual revenue agency(Sainyucho) ,in order to realize TPP.
I would like to hope that the U.S. Government will work on the central bank of Japan directly to extend the purchase of the government bonds on the scale of 1 trillion yen and the amount of purchase of Exchange-Traded Fund(ETF) on the scale of 1 trillion yen ,in order to realize TPP.
By Aozora Japanese Resistance



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