All’s fair in love and currency wars by David Keohane

Whoever steps into Shirakawa’s shoes is likely to be an Abe’er and more ready to really open up the printing press, go for the new 2 per cent inflation target and subject the BoJ to greater amounts of fiscal dominance. 

Significantly, Shirakawa’s departure moves forward the date of the first really significant BoJ meeting to April 4. Nifty political calendar courtesy of Nomura:

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Koo says Japan has gone from trade surplus to deficit, so that the weakening of the Yen is justified. A currency war is justified in the context of a depressed global economy. Germany and China have surpluses.

At Odds With the Government, Japan’s Central Bank Chief Offers an Early Exit

Since late last year, Mr. Abe has taken the bank to task, singling out its tepid monetary policies as the root of Japan’s economic woes. He successfully campaigned on a bolder monetary agenda ahead of nationwide elections in December, arguing that the central bank needed to set an inflation target of 2 to 3 percent. The strategy resulted in a decisive victory for his Liberal Democratic Party.

Markets cheered Mr. Abe’s monetary drive. The Nikkei 225-share index has surged almost 30 percent since mid-November, and the yen has weakened by 15 percent, an advantage for Japanese exporters.