Abe's Stimulus Folly May Destroy Yen, JGBs, Doshisha’s Hama Says

Japanese Prime Minister Shinzo Abe’s reliance on fiscal and monetary easing to defeat deflation may precipitate a “plunge” in the yen and sovereign bonds, said Noriko Hama, an economics professor at Doshisha University’s Business School in Kyoto.

“The Bank of Japan is no longer functioning as a proper central bank,” Hama said at a speech in Tokyo on Nov. 21, referring to the BOJ’s doubling of monthly bond purchases to more than 7 trillion yen ($68.8 billion) in April. “The scariest scenario, and the one we should be most wary of, is a bottomless crash in the yen,” as the global financial community loses faith in the currency, Hama said.