19 Jan 2015
BOJ may take a wait and watch stance – Abe’s economic advisor Yamamoto
FXStreet (Mumbai) - Kozo Yamamoto, a leading expert on monetary policy in Japanese Prime Minister Shinzo Abe's advisory, said that the Bank of Japan (BOJ) need not go for another round of monetary easing in the absence of unexpected external shocks to the economy.
Yamamoto insisted for a wait and watch approach as the consequences from last April’s sales tax hike and slumping oil prices mean that the BOJ is unlikely to meet its inflation target during the fiscal year beginning in April.
Key Quotes:
"What more can the BoJ do? I think the central bank can hold off on action and take a wait-and-see stance for the time being,"
"Japan will probably see inflation hit 2% in fiscal year 2016," Yamamoto predicted, adding that lower gasoline and fuel costs will allow households to spend more on other items, resulting in the economy emerging in a "very good shape."
He added, “Even so, the BoJ must not exit QQE until well into 2017 to ensure Japan does not slip back into stagnation.”
Yamamoto insisted for a wait and watch approach as the consequences from last April’s sales tax hike and slumping oil prices mean that the BOJ is unlikely to meet its inflation target during the fiscal year beginning in April.
Key Quotes:
"What more can the BoJ do? I think the central bank can hold off on action and take a wait-and-see stance for the time being,"
"Japan will probably see inflation hit 2% in fiscal year 2016," Yamamoto predicted, adding that lower gasoline and fuel costs will allow households to spend more on other items, resulting in the economy emerging in a "very good shape."
He added, “Even so, the BoJ must not exit QQE until well into 2017 to ensure Japan does not slip back into stagnation.”