BOJ Move Puts Pressure on China and SE Asia to Cut Rates

Many have called U.S. actions a currency war, but as the reserve currency, the U.S. isn't so much declaring war on any nation as it is making war upon the system. Some countries benefit and some are hurt, but the U.S. doesn't have any competitors. With Japan, that is not the case. Japan competes with South Korea and other East Asian and Southeast Asian nations for export markets, as well as for capital investment in the supply chain. Japan's move is a direct blow to these nations, and even European exporters are going to feel heat from their Japanese competitors.

日本接力美国印钞:黄金跌至四年新低 中国承压

China and South Korea and other Asian countries to bring pressure to cut interest rates

Remittance Network October 31 (Bernama) - Bank of Japan (BOJ) on Friday (October 31) unexpectedly increased stimulus efforts and continue to step on the accelerator of monetary policy, to bring pressure on China and South Korea and other Asian countries, China and South Korea may be accelerated the two interest rate cuts.

Invesco Fixed Income, chief strategist at Robert Waldner said the Bank of Japan unexpectedly easing drag weaker yen, which may also accelerate China's central bank cut interest rates. The bank believes that China will have to cut interest rates sooner than expected, because China is facing deflationary pressure, but regulators are also reluctant to let the yuan depreciate.

HSBC economist Ronald Man said Japan's easing risks to Korean exports. Man pointed out that if the yen against the won continued downside risk, and is considered to endanger the growth potential in Korea, then around the South Korean central bank lowered the policy rate will be below the expected 2.00% increase. Man said that if the Bank of Korea 2015 Korea GDP growth forecast from 3.9% to 3.7% or less, the outside world can expect it to cut interest rates.

South Korean won strengthened usually raise product prices, so that prices in overseas markets less competitive. Korea and Japan in the global automobile market there is competition, electronic products and so on. October, after the Bank of Korea lowered economic growth forecast for next year, Korea will cut its policy rate by 0.25 percentage point to a record low of 2 percent.

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