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BOJ: More easing in the offering, not yet – BBH

FXStreet (Delhi) – Research Team at BBH, suggest that while there may see scope at some juncture to tweak the assets being purchased from an operational standpoint, we think that the BOJ is still satisfied with what it sees to be the underlying economic signals.

Key Quotes

“BOJ Governor Kuroda has repeatedly indicated he would look past the impact of the decline in energy prices on inflation. Although the BOJ has not formally shifted its target measures, Kuroda does appear to be giving greater weight to a measure of inflation (core-core?) that excludes food and energy. This measure stood at 0.8% in August, which is the highest since last year's retail sales tax dropped out of the year-over-year comparison. There is some risk that even this level of inflation overstates the case.”

“Expectation for BOJ action is more focused on the meeting at the end of the month, which is when Kuroda surprised the market last year. With a 5-4 majority, the BOJ announced then that its new monetary base target would be increased from JPY60 trillion to JPY80 trillion.”

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