IMF Researchers Say Japan Monetary Easing Has Benefits For Asian Economies

Japan's extraordinarily easy monetary policy, a source of friction with the United States for pushing the yen’s value down, has had some positive effects on emerging Asian economies, including increased growth and equity prices, International Monetary Fund researchers have found.

The IMF findings were released in a paper Friday as Group of Seven finance ministers and central bank governors began meeting in Japan, where divergent views on Japan’s monetary policy and currency market interventions were expected to be a hot topic.

The paper claims to be the first to model the spillover effects of Japan’s qualitative and quantitative easing program (QQE) on Southeast Asian countries.

QQE was launched in 2013 and targets both government bond purchases as well as other assets, such as exchange-traded funds and real estate investment trusts. The program has helped push down the yen from 82 to the dollar in 2012 to 119 to the dollar by August 2015. Japanese equity prices surged and inflation also strengthened during this period.

International Monetary Fund Managing Director Christine Lagarde (right), Japanese Finance Minister Taro Aso (left) and Governor of the Bank of Japan Haruhiko Kuroda (center) make a ceremonial toast with sake after opening sake barrels at a welcome reception hosted by the City of Sendai on May 19, 2016.PHOTO: KAZUHIRO NOGI/AFP/GETTY IMAGES