The prevailing market view on the region remains negative, mainly centring on China's debt problem and general doubts about Abenomics. We focus on some aspects of this negativity from a sovereign balance sheet perspective and conclude that the potential dangers are overstated.
Given how important central bank policies are for the pricing of assets, our focus has to be on what they do next. If debt monetisation were to occur, it would have significant implications for equity investing.
No turning back — 2% inflation target not only intact but enhanced with a new “inflation overshooting commitment”