I'm curious to get your early thoughts on this stimulus package that's being
floated at the moment we don't have any details but when you take a look at the
state of growth in Japan at the moment do you think a stimulus package is
needed. Yes I think Japan is a
package for promotion of those. Why would a prime minister emphasizes
measures to control energy prices. That is good for short term economic
cycles. But we must also notice that it will
start structural changes of Japan's economy which is a necessary in the long
run. For example changes to order more energy
saving the economy and a greener society and a government focuses on wage
increases. It's okay.
But do we need to raise productivity those for a wage increase to be
sustained put on leave. So I think that most important part of
the policy package is is that side of promotion of the investment of old
growth such as strengthening energy infrastructures strengthening medical
care systems promoting human capital investment and investment for
digitization. But so far Prime Minister a key issue
that has not shown concrete France I hope he will deliver more specific ideas
on what he is going to do in his speech of the day today.
I'm just going to jump in and bring some breaking news to our viewers at the
moment the Brazilian election is headed to a runoff with Lula da Silva and Jacob
ISE scenario headed to that runoff election to take place October 30th.
We knew that if neither candidate managed to get over 50 percent of that
vote that the runoff would happen. We have really seen that dead heat in
the Brazil election and the county that at last count we saw 47 percent for Lula
da Silva. Boston are at 44 percent with about 89
percent of votes tallied in Brazil. Initially we did see that strength of
the Boston area base but we did see Lula da Silva the former leader really coming
back and closing that gap. But it looks like we are now heading on
October 30th for that runoff. So let me get back to the topic at hand.
When you take a look at what I think could be described as a
policy misstep and the market reaction in the U.K.
from the fiscal stimulus package. What are the lessons that Japanese
policymakers would want to learn and avoid at this point.
Wow I think there is so much political instability in the UK and Japanese are
going to have to make sure that they need to care about their fiscal
sustainability in the grand idea as well when they plans to spend Covid spending.
Say soccer this is David here. I just want to get your thoughts too on.
I mean broadly speaking we we've heard direct intervention of course out of the
BMJ when it comes to the Japanese currency.
I'm wondering as a former chief economist there what do you think
they're thinking when they look at the pace of this and thinking too that this
is not a sustainable solution. Well I think the foreign accent IBEX is
effective only as temporary to restrain to a quick moves in the foreign exchange
market so he can kind of the robust uptrend.
So that trend up a strong dollar and a weaker.
Yeah. Given a huge gap the student existing
data ISE rates between us and Japan. Let me just jump in here.
We're just getting some breaking news. I mean you're probably familiar with the
survey to Tom Keene survey is out right now.
Just to break this to our viewers here. So large manufacturers at the estimate
was 10. I know those numbers just loans
themselves don't make a lot of sense but just relatively speaking it is what
we're looking at here. Small businesses negative 5.
The estimate was our negative 4. Also not as good as expectations here.
We're also looking at non manufacturer Tom Keene is at eleven.
That's also a big miss from 15 say soccer.
Let me bring you back in. Just looking broadly at these headlines
and seeing corporate Japan and the confidence not being there.
What is needed. What does the Mujahadeen to end this.
Is this under their control. Well I think the Japanese economy will
continue to recover for at least a year and next year although its base will be
slower than previously expected. I think A B or G will not change its
monetary policy stance on monetary easing.
Is easing stance addressed before the end of this fiscal year.
I think Japan's a potential growth is very still very low.
Less than 1 percent. So I think that the DOJ to keep low
interest rates in their domestic market and
possible policy changes could be in the next fiscal year after a deputy governor
and governor of 10 years. And also the U.S.
Fed's monetary tightening after U.S. monetary tightening ends.