Asia Benefited Bank of Japan

Steps taken by the Bank of Japan (BOJ) to the stimulus can be a boon to Asia, especially in matters of investment flows into the region. However, there is the risk of asset bubbles and debt in the future.

Under intense pressure from the government, the Bank of Japan on Tuesday pledged continued to ease policy as long as possible in order to reach new inflation target to 2%. Previously, the target is increasing prices by 1%.

In addition, the BOJ will increase asset purchases worth 10 trillion yen in 2014, out of the assets expected to be purchased in 2013 worth 101 trillion yen.

Together with massive quantitative easing program launched by the central bank in America and Britain, and the background rate in developed countries is low, the BOJ's decision demonstrates the potential magnitude of capital flows into emerging Asia.

BOJ aggressive action to temporarily offer the situation "win-win" for the flow of capital from Japan could sustain Asia's financial condition following the withdrawal of European banks from the region after the global financial crisis, said Masayuki Kichikawa, chief economist at Merrill Lynch Japan Securities Co. .

"However, if capital inflows too large, there will be a number of problems," he said.

Tai Hui, chief market strategist for Asia at JP Morgan Asset Management, see the BOJ's stance as a basis for investing in asset classes that benefit from the full liquidity.

"We've seen the Japanese retail players to invest in Asia following the BOJ easing earlier. We expect additional stimulus will increase the trend, "he said.
Developing countries in Asia attractive investment target, given the potential for currency appreciation in most countries of Asia as well as high yield debt from Asia. According to Hui, Asian equities also interesting.

Financial authorities around the region showed mixed reactions over BOJ policy.

Bambang Brodjonegoro, head of fiscal policy at the Ministry of Finance, was optimistic that the easing would boost domestic demand Japan.

"Japan is one of Indonesia's largest trading partner. We expect a positive effect of stimulus Japan. Hopefully, the stimulus will increase the "volume of Indonesia's exports, he said.

An official in charge of international financial problems in South Korea's Ministry of Finance to be more careful.

"We closely monitor the financial markets to anticipate the presence of excessive bias spikes in trading or market turmoil. We will launch measures to mitigate volatility if necessary, "he said.

Korea is considering the implementation of additional measures to slow foreign capital flow volatility, said the official. "We can not tell exactly when that action will be taken. Depending on market conditions. We also plan to ask the opinions of the experts. "

A spokesman for Hong Kong Monetary Authority declared Hong Kong dollar exchange rate remains stable so far.

"We will continue to watch the potential for turbulent flow of funds," he said.

Indian Finance Minister P. Chidambaram was interested in the polemics Japanese financial policy issues.

"I think the debate between Prime Minister Abe and central bank governors unprecedented," he told reporters in Hong Kong.

-With contributions from Farida Husna in Jakarta, June Kwanwoo in Seoul, and Chester Yung and Michael Arnold in Hong Kong.

source

please give me comments thanks