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21 May 2014
Further BoJ easing expected in October - Nomura
FXStreet (Bali) - According to Yujiro Goto, FX Strategist at Nomura, additional monetary easing by the BoJ is expected in October.
Key Quotes
"Having revised our outlook for the Japanese economy, we have changed our forecast for the timing of additional monetary easing from July at the earliest to October. We identify three issues."
"First, it is looking increasingly likely that the impact of the consumption tax hike will be within the bounds of expectations. Second, we expect core CPI inflation to slow around two to three months later than initially envisioned because of rebasing. Third, 10-year JGB yields have remained low, contrary to expectations."
"However, we see growing impetus for additional easing by the time of the October policy board meeting, for example a clear divergence between actual inflation and the BOJ’s outlook and market pressure for looser monetary policy."
Key Quotes
"Having revised our outlook for the Japanese economy, we have changed our forecast for the timing of additional monetary easing from July at the earliest to October. We identify three issues."
"First, it is looking increasingly likely that the impact of the consumption tax hike will be within the bounds of expectations. Second, we expect core CPI inflation to slow around two to three months later than initially envisioned because of rebasing. Third, 10-year JGB yields have remained low, contrary to expectations."
"However, we see growing impetus for additional easing by the time of the October policy board meeting, for example a clear divergence between actual inflation and the BOJ’s outlook and market pressure for looser monetary policy."