6 Aug 2015
Further decline in near-term BOJ easing expectations - Nomura
FXStreet (Bali) - Expectations for a BOJ easing into the meeting this week (6-7 August) are low, according to Bloomberg, notes Yujiro Goto, FX Strategist at Nomura.
Key Quotes
"No BOJ watchers expect the Bank to ease at its August meeting, in line with our expectations. Expectations for an October easing have also declined, as only 32% of researchers expect an easing in October compared with 40% last month."
"Only about a third of BOJ watchers now expect the Bank to ease by end-December, even though downside risk for Q2 economic growth is increasing. As market expectations for a near-term BOJ easing have declined further, disappointment from the BOJ may not be a huge downside risk for USD/JPY this month."
"Governor Kuroda’s view on the expected weakness for Q2 GDP growth is still worth monitoring, but his view on the economic outlook into H2 likely remains optimistic, as well as the inflation outlook."
"A couple of key July economic data scheduled at the end of this month, on top of Q2 GDP scheduled for 17 August, will be important, but it is too early to expect dovish comments from Governor Kuroda this week."
"Near-term upside room depends on US economic data, but we do not expect the BOJ and other policy makers to make negative comments on possible USD/JPY appreciation above 125, amid weak economic momentum."
"Expectations for the timing of a BOJ tightening have been largely unchanged from a month ago. In total, 16% of researchers expect the Bank to start tightening by end-2016, while 30% expect the tightening to start by end-2017."
"Only one out of 36 researchers believes that the BOJ can achieve its 2% inflation target in the first half of FY2016 as the Bank states, but six researchers expect the BOJ to start tightening."
Key Quotes
"No BOJ watchers expect the Bank to ease at its August meeting, in line with our expectations. Expectations for an October easing have also declined, as only 32% of researchers expect an easing in October compared with 40% last month."
"Only about a third of BOJ watchers now expect the Bank to ease by end-December, even though downside risk for Q2 economic growth is increasing. As market expectations for a near-term BOJ easing have declined further, disappointment from the BOJ may not be a huge downside risk for USD/JPY this month."
"Governor Kuroda’s view on the expected weakness for Q2 GDP growth is still worth monitoring, but his view on the economic outlook into H2 likely remains optimistic, as well as the inflation outlook."
"A couple of key July economic data scheduled at the end of this month, on top of Q2 GDP scheduled for 17 August, will be important, but it is too early to expect dovish comments from Governor Kuroda this week."
"Near-term upside room depends on US economic data, but we do not expect the BOJ and other policy makers to make negative comments on possible USD/JPY appreciation above 125, amid weak economic momentum."
"Expectations for the timing of a BOJ tightening have been largely unchanged from a month ago. In total, 16% of researchers expect the Bank to start tightening by end-2016, while 30% expect the tightening to start by end-2017."
"Only one out of 36 researchers believes that the BOJ can achieve its 2% inflation target in the first half of FY2016 as the Bank states, but six researchers expect the BOJ to start tightening."