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BoJ: No further QQE until clarity on sales tax - RBS

FXStreet (Bali) - According to FX Strategists at RBS, the BoJ is unlikely to embark upon a new large-scale stimulus until it can obtain further clarity on the future of the second consumption tax hike in 2015.

Key Quotes

"At long last, the Bank of Japan (BoJ) will release its semi-annual Outlook Report, which includes updated forecasts for inflation and growth. It has become increasingly clear that BoJ is unlikely to reach its inflation goals in the 2-year horizon set out when it began its QQE program in April 2013 – but that does not mean the BoJ will not keep its positive assessment on prices intact."

"The BoJ may maintain its positive stance on prices and growth over its forecast horizon, fending off renewed calls for additional easing. The BoJ may want additional clarity on the future of the second consumption tax hike in 2015 before embarking on new large-scale stimulus. In terms of data, September CPI highlights a busy data week in Japan. We favour USD/JPY upside this week – broader-based risk aversion is the key risk to that view."

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