5 Sep 2013
Flash: What to expect from BOJ today? - Nomura
FXstreet.com (Barcelona) - The BOJ is expected to leave policy unchanged at this week’s meeting (4-5 September), notes Yujiro Goto, FX Strategist at Nomura, adding that expectations for more easing are limited currently.
Key Quotes
While near-term BOJ meetings are unlikely to affect the FX market, the Bank’s current stance to keep quietly purchasing JGBs and other risky assets, amid clear signs of an economic recovery and inflation, should sustain gradual JPY weakness."
"The gradual rise in inflation expectations, with low nominal yields anchored by increasing confidence in the BOJ, should sustain JPY weakness further."
"For Governor Kuroda’s press conference, we should focus on his view on the tax debate. Asahi today reported that he said during the tax panel held last week that the BOJ would consider additional easing if the consumption tax was raised as planned next April. His stance to allow easier monetary policy after the planned tax hike next April decreases downside risk to the economy, limiting downside risks for Japanese equities and USDJPY in the medium term.
Key Quotes
While near-term BOJ meetings are unlikely to affect the FX market, the Bank’s current stance to keep quietly purchasing JGBs and other risky assets, amid clear signs of an economic recovery and inflation, should sustain gradual JPY weakness."
"The gradual rise in inflation expectations, with low nominal yields anchored by increasing confidence in the BOJ, should sustain JPY weakness further."
"For Governor Kuroda’s press conference, we should focus on his view on the tax debate. Asahi today reported that he said during the tax panel held last week that the BOJ would consider additional easing if the consumption tax was raised as planned next April. His stance to allow easier monetary policy after the planned tax hike next April decreases downside risk to the economy, limiting downside risks for Japanese equities and USDJPY in the medium term.