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Forex Flash: BOJ plan not significantly more aggressive than Fed’s QE - Nomura

FXstreet.com (Barcelona) - Richard Koo, Chief economist at the Nomura Research Institute notes that the BoJ plan is not significantly more aggressive than the Fed´s QE and using this concept of the statutory reserve deposit multiple, the BOJ’s new policy would lift potential growth in the money supply, and therefore inflation—from 4.8x to 18.7x.

He adds that the latter number is much higher than the corresponding figures of 9.7x for the UK or 3.8x for the eurozone, but is roughly equal to the US multiple of 16.0x and somewhat less than the 21.6x peak there. In that sense, the BOJ’s easing program can be viewed as an attempt to catch up with (and overtake) the Fed on the easing front. He writes, “Estimates based on the quantitative easing schedule provided by the BOJ suggest that Japan’s monetary base (as a multiple of statutory reserves) will overtake the UK sometime this autumn and pass the US next summer.”

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