said Ivailo Izvorski

For China, it is high time to guard against shocks from floods of liquidity amid Japan’s advance in quantitative easing, economists say.

The Japanese government is also planning to issue 10 trillion yen in emergency bonds to fund reconstruction, which would be bought in as a whole by the central bank, the report said.
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When annualized however, assuming it takes two to three years for reconstruction,Abercrombie, that would only account for only 0.7 to 0.8 percent of GDP, which for sure is still far from enough to pull the country out of deflation that lasts for decades.


If historical is any guide,louboutin pas cher, Cao continued, Japan’s economy was better positioned globally before earthquakes in Osaka and Kobe in 1995, but still reconstruction work failed to derail its track of economy.
Reconstruction efforts after the devastating earthquake and tsunami in Japan are estimated to cost 100 billion U.S. dollars,Louboutin chaussure pas cher, or 2 percent of the country’s GDP, said Ivailo Izvorski,Abercrombie and Fitch, the World Bank’s lead economist in east Asia Monday, but warned at the same time it would still do little help to end Japan’s long-term status of deflation.
The damage in Japan’s earthquake and tsunami could range from 122 billion to 235 billion, accounting for 2.5 to 4 percent of GDP and would drag down growth through mid-2011,christian louboutin pas cher, according to a World Bank Asian report released on Monday.
Meanwhile, economists from China are worrying about the impact on China,louboutin pas cher, as Japan is undertaking a so-called quantitative easing monetary policy that may pour large funds into the markets, depressing emerging markets’ efforts to rein in inflation.




To keep the financial system in stable after the quake,christian louboutin pas cher, Japan’s central bank had announced funds injection for four consecutive days, adding up to 51.8 trillion yen ending March 20, Xinhuanet reported.



In one of the worst disasters in Japan, a massive earthquake followed by huge tsunami on March 11 had left more than 15,000 people either dead or missing,louboutin, and caused nuclear plants on the verge of meltdown. Nuclear radiation is still on the rise from the damaged Fukushima nuclear plant.
China Citic Bank Vice Governor Cao Tong held the same view. During a forum on global impact of Japan’s quake on weekend, Cao predicted that the country would have to inject some 100 billion U.S. dollars into the markets to aid reconstruction efforts, and he expected such an amount of funds could generate 2 percent to its GDP.
It will take Japan some 100 billion U.S. dollars and five years for reconstruction after the devastating earthquake, while further quantitative easing may pose challenges to China.

“Growth should tough pick up in subsequent quarters as reconstruction efforts, which could last five years, accelerate,” the World Bank said, “While it is too early to estimate accurately , the cost of the damage is likely to be greater than the damage caused by the 6.9 magnitude Kobe earthquake in 1995 (100 billion U.S. dollars).”

The developed countries are embracing a relatively higher inflation compared to the advanced economies, under which, Japan’s quantitative easing following its major ally in the west would give a boost to inflation in emerging economies, said Chen Yulu, Economist and head of Beijing Foreign Studies University.

In addition, huge demand of energy during the construction period in Japan, both an important source of liquidity and importer of commodities, would also create much inflationary pressures in such countries, he added.
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