Hot off the presses (I need one of those Drudge sirens on top):
TOKYO (AP) — Japan’s central bank has decided to ease monetary policy amid a strong yen and growing political pressure to take action on the faltering economic recovery.
The decision came during an emergency board meeting called by Bank of Japan Gov. Masaaki Shirakawa.
To boost liquidity, the central bank will expand a low-interest loan program for financial institutions to 30 trillion yen ($354.7 billion) from 20 trillion yen.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
TOKYO (AP) — The Bank of Japan is holding an emergency meeting Monday as political pressure mounts for the central bank to ease monetary policy in the face of a surging yen.
In a statement on its website, the bank said the meeting is scheduled for 9 a.m. in Tokyo (0000 GMT; 8 p.m. EDT Sunday). The bank had been expected to convene Sept. 6 at a scheduled two-day policy board meeting.
The news sent Japanese stocks soaring. The Nikkei 225 stock average finished the morning session up 3.1 percent at 9,265.39.
Didn’t some Fed people recently say an aggressive move could hurt markets, by scaring people into thinking the Fed saw serious problems with the economy? It’s late, I’ll try to dig up a quotation tomorrow, and add an update. (BTW, I doubt the BOJ action will have much effect, so I wouldn’t be surprised if stocks fall back at some point. My hunch is that they rose merely because the BOJ seems to have woken up.) And speaking of Drudge, he linked to this sorry article from the NYT:
In a much-anticipated speech on Friday, Ben Bernanke, the Federal Reserve chairman, reiterated his vow to do more to boost the economy if conditions worsened. He did not seem particularly convinced that anything the Fed could do would be enough.
Actually just the opposite. He said there was plenty they could do, but that they weren’t going to do it out of fear it would boost inflation too much. Isn’t the NYT supposed to be our best paper? If he thought the policy would have little impact on AD and inflation, they’d definitely do it with unemployment at 9.5%.