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Forex Flash: Easing at the first 'new BoJ' meeting possible - Nomura

Following BOJ governor candidate Mr. Kuroda remarks on the need for more monetary easing during his intervention at the Japan's upper house yesterday, according to Nomura strategist Yujiro Goto, "in terms of the timing of easing, he said he wants to discuss easing soon, suggesting an easing at the first meeting (April 3-4) is possible" Yujiro says.

Yujiro expands: "He said the BOJ needs to buy a large amount of longer-term JGBs and will consider more purchases of risk assets, but denied the necessity of foreign bond buying for now. He also said he is not considering cutting interest on excess reserves (IOER) at moment while the policy option needs proper discussion."

"From his comments, it is clearer that the 'new BOJ' will focus longer-term JGB investments on a larger scale with some risky asset investment. His comment that other central banks do not have a banknote rule equivalent suggests the 'new BOJ' is likely to consider changing the banknote rule as it accumulates more JGBs" the Nomura strategist adds.

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