Japan: Abe not necessarily against foreign bond buying - MUFG

Derek Halpenny, European Head of GMR at MUFG, suggests that they maintain their view that the BoJ will refrain from taking any policy easing measures next week.

Key Quotes

“But discussions about the Comprehensive Assessment should allow Governor Kuroda to give a clear message that further easing will be forthcoming, perhaps at the meeting when the GDP and inflation forecasts are updated at the end of October.

But we noted with interest PM Abe’s advisor Koichi Hamada’s comment from a recent interview that in a meeting with PM Abe earlier this week PM Abe had agreed current BoJ Law did not exclude the BoJ purchasing foreign bonds for monetary policy purchases. However, Hamada did add that he wasn’t sure whether PM Abe would favour such a step. This looks like a bit of back-tracking by PM Abe who in China at the G20 stated that such purchases were illegal under BoJ Law. Such a rapid reversal of view certainly appears to us as the government wishing to keep all options on the table for a possible future date.”