The Japanese Finance Ministry's ceiling for ministries' budget requests for next fiscal year will cap costs on government debt at a four-year-low of 24.62 trillion yen ($245.2 billion), according to a draft seen on Thursday by Reuters.
The Bank of Japan says there is no possibility of helicopter money, and by a strict definition they are correct. But as the government plans to issue more 40-year bonds, it is looking more and more like some monetization of debt is underway. The BOJ says as long as it buys Japanese government bonds (JGB) from the market, it is not directly underwriting bonds to fund government spending.
The U.S. Federal Reserve and the Bank of Japan showed the two sides of central bank action this week. The Fed's Federal Open Market Committee ended with no change to the U.S. benchmark interest rate. The lone dissenter was once again Federal Reserve Bank of Kansas City President Esther George.
Crude oil prices continue to fade as the oil trade is losing confidence on the global economic outlook. Because of the slowdown, fears surrounding Brexit and an uncertain political environment, optimism that rising demand would meet the trend of decline production has been pushed back by a couple of months.
The European Central Bank held interest rates and its quantitive easing on hold as expected on Thursday, July 21. The euro was weaker against major pairs after there was not clear signal on what the next step for the central bank is despite the anticipated negative effect of the Brexit vote on European growth by forecasters. Earlier in the week the German ZEW was a portent of things to come with a -6.8 confidence in the German economy for the next 6 months. For the full Eurozone the index was -14.7.