BoJ: Look for A Y5trn increase in the growth of the monetary base - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the market’s become pretty convinced that the BOJ will ‘do something’ and that’s a recipe for some pre-meeting nerves, but it does look as though Japanese monetary and fiscal policy are back in harness.

Key Quotes

“We look for A Y5trn increase to Y85trn per annum in the growth of the monetary base, while policy rates fall 0.1% to -0.2%. It’s far from certain this will be any kind of magic pill for the economy, but we do expect the yen to respond. The cut in rates at the end of January, against a backdrop of severe risk aversion, failed to inspire yen-selling, but the market climate is friendlier this week and that makes a big difference.”