German finance minister Wolfgang Schaeuble voiced serious concerns over Japanese monetary policy, after new prime minister Shinzo Abe launched a bold £72billion economic stimulus and doubled the country's inflation target to 2% last week.
"I'm pretty worried about the new policies of Japan's newly-elected government," said Mr Schaeuble, addressing the German parliament's lower house."When you think of the surplus of liquidity on global financial markets, it is fuelled further by a wrong understanding of central bank policy."
Amid the warning Mr Schaeuble remained positive on progress in the eurozone debt crisis, pointing to narrowing sovereign bond spreads as a sign markets are regaining confidence in the beleaguered single currency bloc. However, he did concede the eurozone was "not over the mountain yet."
Improving investor sentiment has prompted the Portuguese government to authorise its debt agency to issue sovereign bonds at will, a move that would mark its first return to bond markets since it sought a bail-out in April 2011. Reports in Portuguese national newspaper Diario Economico said the nation was planning to issue a five-year bond in the next few days. (The Telegraph)
Meanwhile Greece's economic reform programme was given the nod of approval by the IMF on Wednesday when the lender approved the release of a further €3.24billion in bail-out cash to the stricken eurozone nation.
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