Has the Bank of Japan started another round of central bank wargames?

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http://d.ibtimes.co.uk/en/full/1407325/bank-japan-shocks-surprise-easing.jpg

Never pick a fight with a central bank. The only one who gets hurt is you. Unless, of course, you are another central bank.
Central banks routinely intervene in the markets to influence the prices of assets, commodities and currencies. That’s the way monetary policy is conducted. It’s the principle behind QE.
Generally, everyone co-operates.....
Have you ever wondered why they do? In this piece at Forbes I use a game theory explanation for the ability of central banks to manipulate markets, and apply it specifically to the Bank of Japan's exorbitant QE commitments. 

Comments

  1. Anonymous11 November 2014 at 13:39

    Is it your expectation then, Frances, that CBs will indefinitely intervene to keep asset prices (specifically equities) inflated? And will they/can they succeed indefinitely?

    ReplyDelete
  2. Robert Malanowski14 November 2014 at 17:40

    This what do BoJ is madness. They copy policy from FED but without any strategy...

    ReplyDelete

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