Bank of Japan announces massive asset-purchase programme

£90bn of government assets purchased each month starting in January 2014.

The Bank of Japan has made its much-foreshadowed move to attempt to end the years of deflation the country has faced. This morning, it announced that it was repositioning its inflation target from 1 per cent to 2 per cent, and that it would aim to achieve that rate "at the earliest possible time".

The plan involves more than just expectations management, as well. Until the end of this year, the bank will continue with its ¥101trn round of quantitative easing, but from January 2014 it will begin buying ¥13trn — over £90bn — of assets, mostly short-term government debt, each month. The hope is that the massive burst of asset purchases will act to spike inflation, but there are indications that the government also plans to use some of the revenue this monetary policy will accord to it for fiscal stimulus.

As well as being higher than it was before, the inflation target is also stronger, replacing a "vaguely-worded “goal” for price stability over the medium to long-term", according to the Financial Times. That goal was not thought to be symmetrical, either: it merely targeted a positive rate of inflation below 2 per cent. Non-symmetric targets tend to inspire a tendency to undershoot (because if 1.9 per cent is OK but 2.1 per cent is terrible, no bank will aim for 2 per cent inflation), compounding the problems.

The news is not likely to please Germany's chief banker, Jens Weidmann, who yesterday warned of the danger of a government intervening too strongly in the actions of a central bank. Weidmann said in a speech at a Deutsche Boerse event that:

Already alarming violations can be observed, for example in Hungary or Japan, where the new government is interfering massively in the business of the central bank with pressure for a more aggressive monetary policy and threatening an end to central bank autonomy. A consequence, whether intentional or unintentional, could moreover be an increased politicisation of exchange rates.

But Weidmann is complaining into dead air, at this point. Japan's popular nationalist new prime minister, Shinzo Abe, is determined to restore the country to growth by any means possible. A recent tax bill, passed before his election, contains a (non-binding) target of 3 per cent nominal growth and 2 per cent real growth (implying a 1 per cent rate of inflation), which he is likely to adopt as a target for his own government. To achieve that, he needs some aid from the Bank of Japan — aid which he has secured. The question now is whether the bank will be allowed to return to independence when its job is done.

The Bank of Japan. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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How the Standing Rock fight will continue

Bureaucratic ability to hold corporate interest account will be more necessary now than ever.

Fireworks lit up the sky in rural North Dakota on Sunday night, as protestors celebrated at what is being widely hailed as a major victory for rights activism.

After months spent encamped in tee-pees and tents on the banks of the Canonball river, supporters of the Standing Rock Sioux Tribe finally received the news they’d been waiting for: the US Army Corps has not issued the Dakota Access pipeline with the permit it requires to drill under Lake Oahe.

“We […] commend with the utmost gratitude the courage it took on the part of President Obama, the Army Corps, the Department of Justice and the Department of the Interior to take steps to correct the course of history and to do the right thing" said a statement released by the Standing Rock Sioux tribe’s chairman, Dave Archambault II.

With the camp’s epic setting, social-media fame, and echoes of wider injustice towards Native Americans, the movement has already earned a place in the history books. You can almost hear the Hollywood scriptwriters tapping away.

But as the smoke settles and the snow thickens around the thinning campsite, what will be Standing Rock’s lasting legacy?

I’ve written before about the solidarity, social justice and environmental awareness that I think make this anti-pipeline movement such an important symbol for the world today.

But perhaps its most influential consequence may also be its least glamorous: an insistence on a fully-functioning and accountable bureaucratic process.

According to a statement from the US Army’s Assistant Secretary of Civil Words, the Dakota Access project must “explore alternate routes”, through the aid of “an Environmental Impact Statement with full public input and analysis”.

This emphasis on consultation and review is not big-statement politics from the Obama administration. In fact it is a far cry from his outright rejection of the Keystone Pipeline project in 2015. Yet it may set an even more enduring example.

The use of presidential power to reject Keystone, was justified on the grounds that America needed to maintain its reputation as a “global leader” on climate change. This certainly sent a clear message to the world that support from Canadian tar-sands oil deposits was environmentally unacceptable.

But it also failed to close the issue. TransCanada, the company behind Keystone, has remained “committed” to the project and has embroiled the government in a lengthy legal challenge. Unsurprisingly, they now hope to “convince” Donald Trump to overturn Obama’s position.

In contrast, the apparently modest nature of the government’s response to Dakota Access Pipeline may yet prove environmental justice’s biggest boon. It may even help Trump-proof the environment.

“Although we have had continuing discussion and exchanges of new information with the Standing Rock Sioux and Dakota Access, it’s clear that there’s more work to do”, said the Jo-Ellen Darcy, the Army’s Assistant Secretary for Civil Works.

Back in July, the same Army Corps of Engineers (which has jurisdiction over domestic pipelines crossing major waterways) waved through an environmental assessment prepared by the pipeline’s developer and approved the project. The Standing Rock Sioux Tribe subsequently complained that the threat to its water supply and cultural heritage had not been duly considered. This month’s about-turn is thus vital recognition of the importance of careful and extensive public consultation. And if ever such recognition was needed it is now.

Not only does Donald Trump have a financial tie to the Energy Transfer Partners but the wider oil and gas industry also invested millions into other Republican candidate nominees. On top of this, Trump has already announced that Myron Ebell, a well known climate sceptic, will be in charge of leading the transition team for the Environmental Protection Agency.

Maintaining the level of scrutiny finally granted for Standing Rock may not be easy under the new administration. Jennifer Baker, an attorney who has worked with tribes in South Dakota on pipeline issues for several years, fears that the ground gained may not last long. But while the camp at Standing Rock may be disbanding, the movement is not.

This Friday, the three tribes who have sued the Corps (the Yankont, Cheyenne River, and Standing Rock Sioux Tribes) will head to a hearing before the Inter-American Commission on Human Rights, seeking to increase pressure on the government to comply with both domestic and international law as it pertains to human rights and indigenous soveriegnty. 

What the anti-pipeline struggle has shown - and will continue to show - is that a fully accountable and transparent bureaucratic process could yet become the environment's best line of defence. That – and hope.

India Bourke is an environment writer and editorial assistant at the New Statesman.