Month: June 2016

The Bank of Japan (BOJ) is the central bank most likely to adopt “helicopter money” policy but not in its traditional sense, S&P Global Ratings’ chief global economist told CNBC.

However, in today’s context, “helicopter money has to be a kind of monetary policy and fiscal policy coming together as one thing,” said Paul Sheard, chief global economist at S&P Global Ratings.

Japan is one of the most likely candidate to adopt the unconventional policy, Sheard said.

The economy has struggled with deflation for two decades. Even after the BOJ’s massive qualitative and quantitative easing (QQE) program and venture into negative interest rates territory, the Asian economy hasn’t been able to boost domestic consumption and shake off deflation.

European stocks opened higher on Wednesday as global market volatility caused by the Brexit vote eases.

European markets continued to rally despite uncertainty over the UK and European Union’s future relationship after a majority of the British public voted last Thursday to leave the bloc.

On Tuesday, the pan-European STOXX 600 closed 3.3 percent higher provisionally with all bourses and sectors posting solid gains and Wall Street followed suit, closing higher.

Asia markets also opened higher on Wednesday, following gains across US and Europe on Tuesday as jitters eased about the Brexit vote.

Prime Minister David Cameron (who resigned following the Brexit vote) met with his European counterparts in Brussels on Tuesday to discuss the country’s position following the vote. The atmosphere was reported to be “serious but constructive,” as one minister present tweeted. Pressure was applied to the UK to trigger Article 50 which sets in motion the process of withdrawing from the EU.

The heads of the EU’s 27 other member states will continue their meeting on Wednesday without the UK present.

In other news, at least 36 people have been killed and scores more wounded in what appeared to be a coordinated terror attack on Istanbul Ataturk Airport, Turkey’s largest airport.

The exact death toll fluctuated on Tuesday night ET; a senior Turkish official said nearly 50 people were killed in the attack, while Turkish broadcaster HaberTurk cited Justice Minister Bekir Bozdag as putting the number at 31 dead and more than 147 wounded.

There are no major earnings on Wednesday.

A controversial politician in the UK’s ruling Conservative Party has become the first senior government figure to hint at a second EU referendum vote, in what may prove a forlorn hope for disappointed “remain” voters.

The triumph of the “leave” vote in Thursday’s referendum stunned global financial markets and many of the UK public, some of whom are clamoring for a chance to vote again.

A petition posted on the official UK government website calling for a second referendum has gained 3.9 million signatures and is under consideration for a debate in parliament, although outgoing UK Prime Minister David Cameron has ruled out the possibility of another vote on Brexit.

However, Health Secretary Jeremy Hunt raised the possibility of another vote to endorse the terms of the UK’s exit from the EU on Tuesday, in a television interview in which he strongly hinted he would run to succeed Cameron as prime minister.

“I don’t think it needs to be another referendum, but there needs to be some democratic endorsement of the terms in which we leave,” Hunt, who supported “remain,” Hunt told ITV‘s “Good Morning Britain” program.

“We have had nine general elections since we joined the EU and this is such a big thing that I think the terms on which we leave the EU also need to have the support of the British people and I also think that is the way we will get a better deal from our European partners,” he later added.

Polls pointed to a victory for “remain” in the run-up to Thursday’s vote, but “leave” won a narrow victory with 51.9 percent of votes in the UK, where the public has long been skeptical of membership.

Amid the financial market and political fallout — including a Conservatives leadership contest and a “vote of no confidence” in the leader of the opposition Labour Party — some “remain” voters are finding the results hard to swallow. There is speculation the UK might yet squeeze concessions from the EU that would make membership more palatable to the British public — despite officials in Brussels pushing for the UK to head quickly to the exit. This hope is based partially on the assumption the EU will be desperate to prevent other countries clamoring for the own referendums on membership.

So far, only Poland, a newer EU member that like the UK is critical of calls for “ever closer union,” has signaled openness to a second UK referendum.

“Our idea for today…foresees efforts aimed at making Britain return, including a second referendum,” Jaroslaw Kaczynski, the leader of Poland’s ruling party, said on Monday, according to media reports.

Kaczynski added that Brexit would be “very bad” and the EU would need to “radically change” for the UK to remain.

Both Boris Johnson — the Conservative Party’s highest-profile “leave” campaigner and leading candidate to become next prime minister — and Chancellor of the Exchequer George Osborne have said they do not want the UK to rush to exit. Some speculate Johnson may hope to squeeze concessions from Brussels that would warrant a second referendum that would this time be won by “remain.”

“We could yet see a second re-negotiation, followed by a second referendum in which Prime Minister Johnson successfully campaigns for ‘remain,’ having achieved his primary goal by becoming prime minister,” James Strong, a fellow in foreign policy analysis, said in a blog posted on the London School of Economics and Political Science website on Friday.

Referendums — followed by second referendums — on EU treaties have precedent in other member countries and the public appear more willing to vote “yes” in subsequent rounds of voting.

Irish referendums on the constitutional basis of the EU in 2001 and the bloc’s expansion in 2008 were first rejected by the electorate before being approved in second referendums. Similarly, Denmark originally voted to reject the Maastricht Treaty on greater EU integration in 1992, before accepting it in a later referendum.