22 Jan 2015
BoJ: Inflation downgrade to support gradual JPY weakness - Nomura
FXStreet (Bali) - According to Nomura, the large inflation forecast downgrade by the Bank of Japan on Wednesday is likely to keep market expectations for additional easing high for the time being, supporting gradual JPY weakness.
Key Quotes
"The BOJ kept its QQE programme unchanged as expected. Even though the Bank lowered its FY15 inflation forecast significantly to 1.0% from 1.7%, Governor Kuroda maintained his optimistic assessment on inflation expectations."
"Wage negotiations and the impact of the recent oil price decline on households’ and corporates’ inflation expectations will be important to judge the possibility and timing of further BOJ easing."
"USD/JPY depreciated after the BOJ’s announcement as some investors had likely increased their expectations for an IOER cut. However, the large inflation forecast downgrade is likely to keep market expectations for additional easing high for the time being, supporting gradual JPY weakness."
Key Quotes
"The BOJ kept its QQE programme unchanged as expected. Even though the Bank lowered its FY15 inflation forecast significantly to 1.0% from 1.7%, Governor Kuroda maintained his optimistic assessment on inflation expectations."
"Wage negotiations and the impact of the recent oil price decline on households’ and corporates’ inflation expectations will be important to judge the possibility and timing of further BOJ easing."
"USD/JPY depreciated after the BOJ’s announcement as some investors had likely increased their expectations for an IOER cut. However, the large inflation forecast downgrade is likely to keep market expectations for additional easing high for the time being, supporting gradual JPY weakness."