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BoJ to retain a positive outlook for growth, inflation - RBS

FXStreet (Bali) - According to RBS FX Strategist, the BoJ should retain a positive outlook for both growth and inflation at its policy meeting today, even if the new forecasts are lowered modestly.

Key Quotes

"The Bank of Japan (BoJ) holds its October meeting. This decision has been long anticipated because it includes an update to the BoJ’s forecasts for growth and inflation in the semi-annual Outlook Report."

"Growth and inflation have underwhelmed in the aftermath of April’s consumption tax, and the pressure on the BoJ to increase accommodation has risen."

"We are confident that the BoJ will retain a positive outlook for both growth and inflation, even if the new forecasts are lowered modestly."

"Just this week, Governor Kuroda told lawmakers that he felt that inflation would reach the 2.0% goal “around the middle of the current projection period from FY2014 – FY 2016.”

"With inflation still seen as on track, this likely implies that the BoJ is comfortable with its current accommodative stance and will not add to its QQE purchases, which may prove to be a positive for the JPY. Today Japan also releases several notable activity indicators for September, including CPI inflation and the jobless rate."

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