17 Jan 2014
Flash: BoJ not settled on a policy yet - BAML
FXstreet.com (Guatemala) - Research teams at Bank of america Merrill Lynch noted that the BoJ is yet to settle on a clear policy.
Key Quotes:
“Debate over further monetary easing by the Bank of Japan (BoJ) is becoming increasingly important in financial markets in the run-up to the consumption tax hike due in April. The BoJ also mentioned demand swings either side of the tax increase in its statement after the previous Monetary Policy Meeting (19-20 December), and revealed that it had started specific discussions about patterns in the economy after the consumption tax rate hike. We expect it to continue to consider this issue at the 21-22 January Monetary Policy Meeting (MPM)."
"Looking at economic data and financial market activity since the last MPM (particularly share prices and forex), we see no pressing need to change the judgment that the economy is in a gentle recovery."
"In this context, we believe the BoJ itself has probably not yet settled on a clear policy on the need for further easing at this stage, since individual policy board members have mentioned different opinions on this problem. Consequently, we do not envisage any change in the monetary policy framework at the forthcoming meeting."
"The BoJ will also conduct an interim review of its forecasts for the economy and prices at this meeting. We do not expect it to add any great changes to the October Outlook Report, but we believe the inflation forecast will merit some vigilance since the benefits of the weaker yen are likely to peak out YoY from April-June."
Key Quotes:
“Debate over further monetary easing by the Bank of Japan (BoJ) is becoming increasingly important in financial markets in the run-up to the consumption tax hike due in April. The BoJ also mentioned demand swings either side of the tax increase in its statement after the previous Monetary Policy Meeting (19-20 December), and revealed that it had started specific discussions about patterns in the economy after the consumption tax rate hike. We expect it to continue to consider this issue at the 21-22 January Monetary Policy Meeting (MPM)."
"Looking at economic data and financial market activity since the last MPM (particularly share prices and forex), we see no pressing need to change the judgment that the economy is in a gentle recovery."
"In this context, we believe the BoJ itself has probably not yet settled on a clear policy on the need for further easing at this stage, since individual policy board members have mentioned different opinions on this problem. Consequently, we do not envisage any change in the monetary policy framework at the forthcoming meeting."
"The BoJ will also conduct an interim review of its forecasts for the economy and prices at this meeting. We do not expect it to add any great changes to the October Outlook Report, but we believe the inflation forecast will merit some vigilance since the benefits of the weaker yen are likely to peak out YoY from April-June."