18 Feb 2016
BoJ stimulus addition coming soon? - BBH
Research Team at BBH, notes that the Abe advisor Etsuro Honda said that the BOJ could add to its stimulus program as early as the March 14-15 meeting.
Key Quotes
“Honda also called for a supplemental budget, and added that the sales tax increase should be postponed two years until 2019. Meanwhile, Japan reported December machine orders at -3.6% y/y vs. -2.8% consensus. Final machine tool orders for January came in at -17.2% y/y, same as the preliminary reading.
Of note, Japan’s overnight call rate went negative for the first time since 2004, as the BOJ’s negative rate policy went into effect. Given how market sentiment has improved, we would have thought this pair would be trading higher. Note that 115 is the minimal retracement objective of this year’s sharp drop, followed by 116.35.”
Key Quotes
“Honda also called for a supplemental budget, and added that the sales tax increase should be postponed two years until 2019. Meanwhile, Japan reported December machine orders at -3.6% y/y vs. -2.8% consensus. Final machine tool orders for January came in at -17.2% y/y, same as the preliminary reading.
Of note, Japan’s overnight call rate went negative for the first time since 2004, as the BOJ’s negative rate policy went into effect. Given how market sentiment has improved, we would have thought this pair would be trading higher. Note that 115 is the minimal retracement objective of this year’s sharp drop, followed by 116.35.”