Oliver's Insights - Japanese reflation

This note takes a closer look at monetary reflation now getting underway in Japan. The key points are as follows:

• While it likely still has more to do, the Bank of Japan is on a path towards major policy reflation for the Japanese economy.
• This is likely to see further downwards pressure on the yen and strong gains in Japanese shares.
• It is also positive for the global economy as Japan will likely no longer be a drag on global growth going forward.
• While Japanese monetary reflation adds to upwards pressure on the Australian dollar, a stronger Japan will be positive for Australia overall as it remains our second biggest export market.

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