Central banks are nothing if not dedicated followers of fashion. Less than a month after the Federal Reserve opted for an explicit inflation target, the Bank of Japan has followed suit.
However, the BoJ’s adoption of an inflation target probably owes more to political pressure than the whims of its central bankers; unlike Ben Bernanke, BoJ governor Masaaki Shirakawa has never been a proponent of the framework.
And this perhaps explains why the BoJ has been more original than most on how it plans to target inflation. Read more
Investors’ attention will be fixed on Threadneedle Street tomorrow morning, when the Bank of England releases its latest forecasts for inflation and signals whether markets should expect more quantitative easing in May.
Sir Mervyn King’s latest missive to the chancellor, out today, seeks to explain why inflation remains significantly above target. Will it offer any clues about future QE?
Though it’s not worth reading too much into the letter the governor’s words do offer some support to the view that the asset purchases announced earlier this month will be the last. Read more