Japan's Great Economic Experiment Starts — Here's What You Need ot Know

thenews 2013.04.04 06:57

This is it – the moment the Abenomics-watchers have been waiting for.

Wednesday night, the Bank of Japan will conclude its first monetary policy meeting with new BoJ Governor Haruhiko Kuroda at the helm.

So far, Japan's great "Abenomics" experiment – which seeks to employ bold policy tools to overcome more than a decade of deflation – has been mostly talk.

Now, the rubber meets the road for Kuroda, the monetary policy dove selected by recently-elected Japanese Prime Minister Shinzo Abe to lead the charge from the BoJ, which has to do a lot of the heavy lifting.

There are a few things everyone is looking for, according to analysts at Morgan Stanley, BofA Merrill Lynch, and Deutsche Bank – an increase in the size of the Bank of Japan's quantitative easing program, a directive to start buying longer-dated bonds as part of those asset purchases, a cut in the interest rate the central bank pays on excess reserves, and stepped-up purchases of risk assets like ETFs.