3 Dec 2013
Flash: Yen weakness accelerated by Reuters BoJ report - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that Yen weakness has also accelerated following the release yesterday of a report from Reuters stating that the BoJ is working on contingency plans for further economic stimulus according to officials briefed on the process.
Key Quotes
“Options for further monetary stimulus reportedly include: i) major purchases of stock market linked funds or other riskier assets, and ii) more radical easing measures including increased JGB purchases.”
“However, one of the officials reportedly stated that the “there’s no sense that further stimulus is imminent” although “there’s no harm in thinking about options”.”
“The report is broadly consistent with current market expectations that the BoJ may ease monetary policy further in Q2 or Q3 2014 following the implementation of the sales tax hike from April.”
“According to the officials, the BoJ might start to consider additional stimulus if: i) economic data from July onwards shows that the tax hike is hitting the economy harder than expected, ii) there is an abrupt yen rise say to 95 per US dollar, or if iii) the outcome of spring wage negotiations and fiscal considerations prove disappointing.”
Key Quotes
“Options for further monetary stimulus reportedly include: i) major purchases of stock market linked funds or other riskier assets, and ii) more radical easing measures including increased JGB purchases.”
“However, one of the officials reportedly stated that the “there’s no sense that further stimulus is imminent” although “there’s no harm in thinking about options”.”
“The report is broadly consistent with current market expectations that the BoJ may ease monetary policy further in Q2 or Q3 2014 following the implementation of the sales tax hike from April.”
“According to the officials, the BoJ might start to consider additional stimulus if: i) economic data from July onwards shows that the tax hike is hitting the economy harder than expected, ii) there is an abrupt yen rise say to 95 per US dollar, or if iii) the outcome of spring wage negotiations and fiscal considerations prove disappointing.”