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Archives : No.33

May-Jun 2016

No.33
No.33 ,Economy  Jun 05, 2016

Interview:
Preventing Deflationary Pressure from Flaring Up Again
― Investors Placing Funds in Assets Other Than Government Bonds

IWATA Kazumasa, President of the Japan Center for Economic Research (JCER)

--- The Bank of Japan (BOJ) has decided to lower the interest rate imposed on a portion of the money private banks deposit in current accounts at the BOJ to negative 0.1%. What is your take on this decision by the BOJ?
IWATA Kazumasa: Inflation expectations are declining, and there is an increasing risk of deflationary pressure mounting again in Japan. Markets are also losing their stability against the backdrop of the economic slowdown in China and other countries, the declined value of the renminbi, and low crude oil prices. There was a risk that Abenomics would suffer a reversal if things were left as they were. The BOJ decision can be seen as a move to put the brakes on these risks and prevent deflationary ... [Read more]

No.33 ,Economy
Jun 05, 2016

The Bank of Japan Can Continue Quantitative and Qualitative Monetary Easing for Only Two More Years: The Adoption of Negative Interest Rates Is Proposed
– Eliminating the Zero Lower Bound is Crucial

IWATA Kazumasa, Japan Center for Economic Research (JCER) President

The Bank of Japan (BOJ) decided to put off additional easing at a meeting held at the end of October 2015 for setting a monetary policy. In my opinion, whether or not the BOJ takes such a step depends on whether market participants’ inflation expectations fall sharply. The important thing here is the natural rate of interest. It is an equilibrium real interest rate that is neither stimulative nor tightening for the economy (in other words, neutral for the economy). According to analysis by the Financial Research Team of the Japan Center for Economic Research (JCER), the natural rate of interest for Japan fell below zero in the mid-1990s. The rate was around negative 0.5% in the latest period. (Refer to Figure 1.)... [Read more]

No.33 ,Culture
Jun 05, 2016

A Sardine-Shaped Cloud

Haiku International Association President Arima Akito delivers his welcome address.

The prize-giving ceremony for the 17th Haiku International Association Haiku Contest was held at the Arcadia Ichigaya Hotel in Tokyo on 5 December 2015. The prizewinning works and judges’ summations here follow, along with an extract of the speech given at the ceremony by the haiku enthusiast Radu Şerban, Ambassador of Romania to Japan. ... [Read more]

No.33 ,Economy
Jun 05, 2016

Interview:
Intermediary Functions of Banks Have Declined
― Limits of Monetary Policies Have Been Exposed

--- The Bank of Japan (BOJ), which had maintained that it would “do anything possible” to achieve the target year-on-year consumer price index increase rate of 2%, decided to adopt a negative interest rate policy.
Ikeo: As BOJ Governor Kuroda Haruhiko said, there are still things the BOJ can do in the area of monetary policies. But that does not mean there are “effective measures” remaining. When I say “effective measures,” I am referring to policy measures that produce results which surpass adverse reactions in their own way and change the economy for the better. Whether the negative interest rate policy falls under this category is open to question. I think the latest BOJ decision actually revealed the limits of monetary policies... [Read more]

No.33 ,Culture
Jun 03, 2016

The Origins of Japanese Culture Uncovered Using DNA
―What happens when we cut into the world of the Kojiki myths using the latest science

MIURA Sukeyuki: The Kojiki (Records of Ancient Matters) has one distinguishing feature in the fact it includes a mixture of both Southern and Northern style myths. This is proof that Japanese culture was originally not only one culture, but rather came into existence while being influenced by its various surroundings; but when it comes to trying to seek out the origins of that culture, as we would expect, there are limits to how far we can get using only an arts and humanities-based approach. That’s where your (Professor Shinoda’s) area of expertise—molecular anthropology—comes in and corroborates things scientifically for us. By analyzing the DNA remaining in ancient human skeletal remains, your research closing in on the origins of the Japanese people is beginning to unravel when the Jomon and Yayoi peoples and so on came to the Japanese archipelago, where they came from, and the course of their movements, isn’t it? In recent times we’ve come to look forward to the possibility that, by watching the latest developments in scientific research, we may be able to newly uncover the origins of Japanese culture.... [Read more]

No.33 ,Society
May 31, 2016

Primatology (ape studies) and DNA research unlock the answers…
Where Do Human Beings Come from, and Where Are We Heading?

Racial discrimination, sex, the aging population…
Watching gorillas gives us insight into the future of human society
Fukuoka: Professor Yamagiwa, you were recently appointed president of Kyoto University. I myself too started my gene research at Kyoto University’s Faculty of Agriculture as a junior of yours, but later transferred to Aoyama Gakuin University, and now live life as a researcher in New York. I’m what you might call a kind of stray monkey wandering from troop to troop. I guess that makes you the boss monkey, doesn’t it (laughs)?
Yamagiwa: When you say “boss monkey” I think you’re probably picturing something like a Japanese macaque or other monkey, but actually I’m a gorilla (laughs). ... [Read more]

No.33 ,Economy
May 30, 2016

Issues Presented in the Paris Agreement

--- The parties to the United Nations Framework Convention on Climate Change adopted a new international framework for measures against global warming called the Paris Agreement at their 21st meeting (COP21) held in Paris, France in December 2015. Why is global warming a problem in the first place?
ARIMA Jun: The greenhouse gas (GHG) emissions are continuously increasing, which is causing gradual increase of global average temperature. While there are still some skepticism about global warming, the majority of scientists gathering at the Intergovernmental Panel on Climate Change (IPCC) are of the view that anthropogenic GHG emissions are the cause of global warming.... [Read more]

No.33 ,Economy
May 18, 2016

The Good and the Bad of a Negative Interest Rate Policy:
Zero Interest Rate on Cash Constrains the Policy’s Effectiveness
Fears of currency weakness inviting competition ― Market senses limits to monetary policy

The Bank of Japan blindsided most forecasts and decided to adopt a negative interest rate policy (a policy that sets the interest rate at below zero on current account deposits that banks keep with the BOJ) at its Monetary Policy Meeting on January 29. The context that can be suspected here is the concern, among others, that the economy would struggle further as a result of the great market volatility that has been occurring since the beginning of the year, as the inflation rate did not rise as intended despite the unprecedented quantitative and qualitative monetary easings that were implemented over a period of three years. In fact, expectations of inflation that can be ascertained from the inflation swap market – although problems exist in viewing it as an indicator – show that two-thirds of the rise in expectations of higher inflation, which had been ... [Read more]

No.33 ,Diplomacy
May 17, 2016

Mao Zedong, Founding Father of the People’s Republic of China, Conspired with the Japanese Army

On 1 October 1949, Mao Zedong declared the creation of the People’s Republic of China (PRC). The achievement of Mao Zedong as founding father of the PRC is, indeed, great. If we focus attention on this achievement alone, Mao Zedong can be described as “a man of great stature” who deserves to be respected. It should be noted, however, that the PRC is a state that was ultimately created through victory in the Chinese Civil War between the Kuomintang (KMT) forces led by Chiang Kai-shek and forces loyal to the Communist Party of China (CPC) and is not by any means a state created by defeating the Japanese Army in the Sino-Japanese War. The proof of this is that Japan announced defeat on 15 August 1945, but it was 1 October 1949 that the PRC was founded. During this four-year period, the KMT and the CPC... [Read more]

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