22 Dec 2014
No reaction to the BoJ’s status quo – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis at MarketPulse shares the previous week’s highlights, noting that after the FOMC the BoJ’s policy statement was the final risk event, but it failed to invoke a significant response as its effect withered out quickly.
Key Quotes
“The final event risk was to come from the Bank of Japan (BoJ), but it seems to have petered out rather quickly. As expected, the BoJ decided to maintain the easing policy adopted in late October by an 8-1-majority vote. The surprise came in the assessments.”
“Despite the recent disappointment in the country’s gross domestic product figures, Governor Haruhiko Kuroda and his team actually raised their assessment on industrial output, exports, and housing investment.”
“The BoJ reiterated that their economy continues to recover moderately as a trend, but also added the “decline in demand following front-loaded increase before tax hike is waning as a whole.” A weaker yen seems to be working, and the BoJ also commented on exports showing signs of picking up, while Japanese housing investment and industrial output problems seem to be “bottoming out”.”
“On inflation, the BoJ reiterated that consumer-price index expectations for the near-term remain around +1%. Japan’s Finance Minister, Taro Aso, noting that his country is continuing its gradual recovery has backed this.”
“Separately, a Nikkei report is speculating that Prime Minister Shinzo Abe’s fiscal stimulus package is to come in around +¥3.5T, well above the market’s initial estimate of +¥2-3T. If true, the next course of action would be a cabinet approval, whispered to be as early as December 27. Abe and his fellow cohorts are not expected to undertake any new debt issuance to fund the stimulus package.”
Key Quotes
“The final event risk was to come from the Bank of Japan (BoJ), but it seems to have petered out rather quickly. As expected, the BoJ decided to maintain the easing policy adopted in late October by an 8-1-majority vote. The surprise came in the assessments.”
“Despite the recent disappointment in the country’s gross domestic product figures, Governor Haruhiko Kuroda and his team actually raised their assessment on industrial output, exports, and housing investment.”
“The BoJ reiterated that their economy continues to recover moderately as a trend, but also added the “decline in demand following front-loaded increase before tax hike is waning as a whole.” A weaker yen seems to be working, and the BoJ also commented on exports showing signs of picking up, while Japanese housing investment and industrial output problems seem to be “bottoming out”.”
“On inflation, the BoJ reiterated that consumer-price index expectations for the near-term remain around +1%. Japan’s Finance Minister, Taro Aso, noting that his country is continuing its gradual recovery has backed this.”
“Separately, a Nikkei report is speculating that Prime Minister Shinzo Abe’s fiscal stimulus package is to come in around +¥3.5T, well above the market’s initial estimate of +¥2-3T. If true, the next course of action would be a cabinet approval, whispered to be as early as December 27. Abe and his fellow cohorts are not expected to undertake any new debt issuance to fund the stimulus package.”