15 Dec 2015
JPY: Tankan inflation expectations continue to decline - MUFG
FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, suggests that BoJ concerns will have been heightened by a further decline in companies’ inflation expectations as measured in the latest Tankan inflation survey which was released overnight.
Key Quotes
“The BoJ is scheduled to meet later this week as well. A Bloomberg report ahead of the meeting has stated that BoJ officials are gaining confidence in the reliance of Japan’s economy, while keeping a close eye on the impact of low oil prices on inflation expectations according to people familiar with the central bank’s discussions. The latest economic data from Japan has revealed that Japan’s economy has been gathering momentum in line with the BoJ’s expectations. However, the BoJ are reportedly concerned that the renewed slide in the price of crude oil could suppress prices in the long-term and are closely watching gauges of inflation expectations.”
“Companies expected general prices to rise 1.3% in three years’ time down from 1.6% this time last year. Companies expect general prices to rise 1.4% in five years’ time down from 1.7% this time last year. The ongoing decline in companies’ inflation expectations will keep alive expectations that the BoJ may need to ease policy further next year but is unlikely undermine the yen in the near-term.”
Key Quotes
“The BoJ is scheduled to meet later this week as well. A Bloomberg report ahead of the meeting has stated that BoJ officials are gaining confidence in the reliance of Japan’s economy, while keeping a close eye on the impact of low oil prices on inflation expectations according to people familiar with the central bank’s discussions. The latest economic data from Japan has revealed that Japan’s economy has been gathering momentum in line with the BoJ’s expectations. However, the BoJ are reportedly concerned that the renewed slide in the price of crude oil could suppress prices in the long-term and are closely watching gauges of inflation expectations.”
“Companies expected general prices to rise 1.3% in three years’ time down from 1.6% this time last year. Companies expect general prices to rise 1.4% in five years’ time down from 1.7% this time last year. The ongoing decline in companies’ inflation expectations will keep alive expectations that the BoJ may need to ease policy further next year but is unlikely undermine the yen in the near-term.”