8 May 2015
Stable long-term inflation expectations among bond investors – Nomura
FXStreet (Barcelona) - Yujiro Goto, FX Strategist at Nomura, notes that although near-term inflation expectations among bond investors declined, the long term expectations remained unchanged.
Key Quotes
“Bond investors’ Japanese inflation expectations declined further for the near term, while 10yr inflation expectations were largely unchanged in April, according to Nikkei Quick. 1yr inflation expectations fell to +0.81%, their lowest level since August 2013, from +0.93% the previous month. 2yr inflation expectations also dropped to +1.11%, their lowest since August 2013, from +1.18%.” 10yr inflation expectations inched up to +1.30% from +1.29%.”
“The BOJ has been emphasising the improvement in inflation expectations as one of the important factors for the underlying inflation trend. The BOJ eventually needs to boost long-term inflation to the 2% level, and stagnation around 1.3% may not be desirable for the Bank.”
“Nonetheless, steady 10yr inflation expectations may not encourage the BOJ to consider additional easing in the near future, while household and corporate inflation expectations are likely to be more important.”
Key Quotes
“Bond investors’ Japanese inflation expectations declined further for the near term, while 10yr inflation expectations were largely unchanged in April, according to Nikkei Quick. 1yr inflation expectations fell to +0.81%, their lowest level since August 2013, from +0.93% the previous month. 2yr inflation expectations also dropped to +1.11%, their lowest since August 2013, from +1.18%.” 10yr inflation expectations inched up to +1.30% from +1.29%.”
“The BOJ has been emphasising the improvement in inflation expectations as one of the important factors for the underlying inflation trend. The BOJ eventually needs to boost long-term inflation to the 2% level, and stagnation around 1.3% may not be desirable for the Bank.”
“Nonetheless, steady 10yr inflation expectations may not encourage the BOJ to consider additional easing in the near future, while household and corporate inflation expectations are likely to be more important.”