Reality wins a round

It is so hard to accept not being normal...

Bank of Japan to Keep Pumping Cash Into the Economy
Bloomberg

Jan. 20 -- Japan's central bank held interest rates near zero and will keep pumping cash into the economy as it awaits evidence that deflation is beaten.

Policy makers kept the bank's target for reserves it makes available to lenders at between 30 trillion yen ($259 billion) and 35 trillion yen, six times more than in March 2001, the bank said in Tokyo. The decision, made at the end of a two-day meeting, was by a 7-2 majority.

One should not read too much into a single meeting. But by voting 7-2, the Board is sending the message it is willing to take a flyer on the promises made by politicians and bureaucrats to carry out responsible and rapid fiscal retrenchment.

Let us hope the politicians, particularly the LDP freshmen from the long-neglected urban districts, hang tough at budget time.

On the labor cost side, I am seeing a lot of retail "Help Wanted" signs with hourly compensation above 1100 yen. That is a non-trivial amount of change for a young person or an immigrant.