12 Jun 2015
BOJ: Case for further easing weaker than supposed - Deutsche Bank
FXStreet (Bali) - The case for additional BOJ policy easing is much weaker than supposed, notes Alan Ruskin, Macro strategist at Deutsche Bank.
Key Quotes
"In Japan, QE cannot be expected to run forever. Very easy monetary policy may have to navigate another sales tax hike and fiscal consolidation."
"Nonetheless, the marginal gains from QE and money base expansion in particular are minimal for an economy that has already largely closed the output gap."
"Similarly goods inflation measures do not capture the extent to which deflationary psychology has been broken."
"The case for additional policy easing is much weaker than supposed and Taylor Rules already argue for solidly positive yen rates, which are very different from the Euro area.
Key Quotes
"In Japan, QE cannot be expected to run forever. Very easy monetary policy may have to navigate another sales tax hike and fiscal consolidation."
"Nonetheless, the marginal gains from QE and money base expansion in particular are minimal for an economy that has already largely closed the output gap."
"Similarly goods inflation measures do not capture the extent to which deflationary psychology has been broken."
"The case for additional policy easing is much weaker than supposed and Taylor Rules already argue for solidly positive yen rates, which are very different from the Euro area.