Does Bernanke bring helicopter ideas to BOJ?

With fresh smell of stimulus in the morning, Yen has weakened in the Asian hours of trading on Monday as former Federal Reserve governor Ben Bernanke visits Bank of Japan. It was not a surprise move by the end of last week, it was widely known that he will be visiting governor Kuroda as well as Prime Minister Shinzo Abe. The Japanese yen is the weakest performer today, down as much as 1.5 percent. The yen is currently trading at 101.9 per dollar.

According to Reuters, it has been arranged for Bernanke to meet key government officials today. According to the news agency’s reporting Mr. Bernanke has visited Bank of Japan (BoJ), however, it wasn’t concerned whether he has met BoJ governor Kuroda or not.

Speculations are going high that there could be additional stimulus from Bank of Japan (BoJ) soon and Ben Bernanke’s visit is just setting the stage for it. Some in the market are even suggesting that Ben Bernanke is visiting BoJ and Prime Minister Abe to discuss “Helicopter Money” a term coined by American economist Milton Freidman and cited by Bernanke when he was the Fed governor. “Helicopter Money” is a concept which is alternative to quantitative easing and involves permanent financing of government deficits.

Though central banks around the world including BoJ indicated in the past that “Helicopter Money” won’t be used, BoJ is the closest one who might trigger that. So far the central bank’s adoption of negative rates and quantitative easing have failed to trigger inflation desired and strength of the yen this year may push the country towards deeper deflation. It is highly likely that Mr. Bernanke is in japan to discuss other policy possibilities including the helicopter.