25 Apr 2014
Potential BoJ easing in July? - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, estimates the BoJ could incur in further monetary easing by July.
Key Quotes
"The depreciation of the yen remains the most obvious direct way for the BOJ to manage achieving that target and the stability of USD/JPY so far this year means the inflationary impetus from yen depreciation is fast disappearing. USD/JPY is now at a similar level as at the beginning of December last year and prior to that a similar level to last May following the BOJ QQE easing in April last year."
"With the annual change in the yen fast reverting toward zero percent, further depreciation would help remove the disinflation bias now evident in the imported corporate goods price index. The annual change in corporate imported goods prices has fallen from 13.9% in December to 4.3% in March (Chart of the day)."
"Our colleagues in Tokyo continue to believe there is a good prospect of additional BOJ easing, perhaps in July. Finally, any yen selling related to the inflation data faded with tensions in Ukraine rising fast."
"There was also some disappointment that PM Abe and President Obama were not able to announce some formal resolution to the disagreements over ongoing trade negotiations under TPP. Positive comments in regard to progress were made but Finance Minister Aso stated that agreement prior to the mid-term elections in the US was unlikely."
Key Quotes
"The depreciation of the yen remains the most obvious direct way for the BOJ to manage achieving that target and the stability of USD/JPY so far this year means the inflationary impetus from yen depreciation is fast disappearing. USD/JPY is now at a similar level as at the beginning of December last year and prior to that a similar level to last May following the BOJ QQE easing in April last year."
"With the annual change in the yen fast reverting toward zero percent, further depreciation would help remove the disinflation bias now evident in the imported corporate goods price index. The annual change in corporate imported goods prices has fallen from 13.9% in December to 4.3% in March (Chart of the day)."
"Our colleagues in Tokyo continue to believe there is a good prospect of additional BOJ easing, perhaps in July. Finally, any yen selling related to the inflation data faded with tensions in Ukraine rising fast."
"There was also some disappointment that PM Abe and President Obama were not able to announce some formal resolution to the disagreements over ongoing trade negotiations under TPP. Positive comments in regard to progress were made but Finance Minister Aso stated that agreement prior to the mid-term elections in the US was unlikely."