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BOJ easing coming this October amidst uncertainty– Goldman Sachs

FXStreet (Delhi) – Naohiko Baba, Research Analyst at Goldman Sachs, suggests that in the middle of large global uncertainty, BOJ is likely to ease further in its forthcoming policy meeting on October 30.

Key Quotes

“We estimate that the BOJ will significantly lower its FY2015 real GDP growth forecast to around +1.0% yoy from +1.7% as of July, and lower its inflation forecast to around +0.3% from +0.7%. We also expect it to slightly lower its FY2016 price outlook.”

“Kuroda’s comments seem to be calculated to accommodate either more, or no more, easing. While strongly affirming the effects of the BOJ’s unprecedented easing, Governor Kuroda appears to be drawing various lines of defense considering the possibility that the BOJ may need to ease further in the near future.”

“It appears to be closely watching the direction to be taken by the third Abe Administration, which has just been inaugurated.”

“BOJ’s main options are extending the duration of its JGB purchases and increasing ETF purchases.”

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