It cannot be denied that there was a sense of euphoria, or an overexpectation of economic growth, in East Asia. When there is an influx of abundant funds based on such expectations, upward pressure is exerted on the foreign exchange rate of the country’s currency.
In my view, sovereign bond purchases are – if rightly designed – a legitimate instrument, but in the specific context of the euro area an instrument which should only be used in exceptional cases to fend off a deflationary spiral.