Exit from QE policies 'fraught with risk'

CONCERNS were voiced yesterday about the fallout on bond markets from the US Federal Reserve's decision to further "taper" its securities purchases, as the Asian Development Bank (ADB) warned of possible "contagion" effects and a prominent economist in Japan suggested that exit from quantitative easing (QE) policies was fraught with risk.

Emerging East Asia's local-currency bond markets "have weathered recent market volatility well but risks to the markets are ticking up and countries need to be prepared", the ADB said upon the release of its latest Asia Bond Monitor publication.

Meanwhile, Richard Koo, chief economist of Japan's Nomura Research Institute, launched a scathing attack on the QE policies of the Bank of Japan (BOJ), the Fed and other central banks while predicting that exit from these massive monetary easing exercises could provoke crises.