CCTV Script 19/03/13
This is the script of CNBC's news report for China's CCTV on March 19, Tuesday.
Welcome to CNBC business daily.
Masaaki Shirakawa steps down as Bank of Japan governor today, making way for policy dove Haruhiko Kuroda to take over as the central bank's head tomorrow, along with two new deputy governors, Kikuo Iwata and Hiroshi Nakaso.
Deputy Japanese economy Minister Yasutoshi Nishimura said yesterday that he expects Kuroda to adopt strong monetary easing polices.
So will Kuroda live up to expectations?
[Sound on tape by Masayuki Kichikawa, MD, Bank Of America Merrill Lynch: Mr. Kuroda has already said that he will try for a 2% inflation target within two years. It is clear that he will move rapidly after he has been inaugurated as the governor for the BoJ.]
[Sound on tape by John Calverly, Head of Macroeconomics, Standard Chartered: I don't think that Japan has done quantitative easing correctly over the years. They focus very much on purchasing short term bonds, and that has very little impact, because when you buy short term bonds, you're buying them from banks, and banks simply change their balance sheets slightly. There's no new lending, there's no asset price increase, there's no currency effect. Further down the curve, you actually affect the broad money supply directly, because you tend to buy from non-banks, from insurance companies, pension funds and so on. And that has a direct impact on the broad money supply.]
Nishimura also said that the central bank should consider buying longer-term government bonds. So what type of asset-purchases will Kuroda undertake?
[Sound on tape by Masayuki Kichikawa, MD, Bank Of America Merrill Lynch: Under Mr. Kuroda's leadership, the BoJ will begin to buy more longer dated JGBs from the market.]
The turmoil in Cyprus briefly strengthened the yen, with many investors still expecting the currency to weaken under Kuroda.
But could safe-haven buying due to the euro zone's debt crisis stop the decline?
[Sound on tape by Masayuki Kichikawa, MD, Bank Of America Merrill Lynch: Still, we are experiencing some deflation, and to that extent the Japanese yen is still in a territory of overvaluation in my view.]
[Sound on tape by Stuart Oakley, MD, Nomura: That trade - a weaker yen - is very much in play. I do think the BOJ will deliver; they have to deliver in the two meetings in April.]
Li Sixuan, from CNBC's Asia headquarters.