Stocks Fall on BOJ Official’s Comment (Bloomberg)
Stocks fell today, which sent the S&P lower for a second day, after Bank of Japan Governor Haruhiko Kuroda said he sees no need to expand monetary stimulus anytime soon. “The market has almost become addicted to monetary stimulus,” Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank in San Francisco, said. “Any sense that the monetary stimulus will slow down or stop, and that by no means is the case in Japan, but just on the margin Japan won’t be more aggressive is the reason for the concern.”
The yen jumped today after the Bank of Japan decided not to announce any other significant measures to curb volatility in the bond market, adding anxiety about whether it will uphold its commitment to easy money policies. “The BoJ’s announcement was not necessarily significant, but headed into the meeting there was some hope they would extend the lending terms and they disappointed on that end,” said Vassili Serebriakov, foreign exchange strategist at Wells Fargo in New York.
Conventional wisdom that the unemployment rate must hit a benchmark 150,000 to maintain the jobless rate level has now been quashed. According to the Chicago branch of the Federal Reserve, researchers say that the level must be closer to 80,000, and by 2016, the number will continue to fall down to 35,000. “The projected slowdown is based on 1) a continuing decline in trend labor force participation attributable to the aging of the baby boomer generation and 2) a lower level of projected population growth going forward,” Daniel Aaronson, vice president and director of microeconomic research, and Scott Brave, senior business economist, said.