27 Apr 2015
BoJ to maintain bullish stance - GS
FXStreet (Guatemala) - Analysts at Goldman Sachs expect a no change from the BOJ but warned to watch out for inflation surprises.
Key Quotes:
"Our Tokyo-based economists expect that the BOJ will stay on hold with QQE and maintain its bullish stance on growth and prices, with only a slight downward revision to the FY2015 outlook. In their opinion, the BOJ is likely to make a further cut in the price outlook for FY2015 (when the 2% inflation target was meant to be met) in July when further easing could also be announced."
"That said, they also note that there is great uncertainty around the price outlook due to the recent stronger-than-expected pickup in oil prices and a surcharge associated with the renewable energy purchasing scheme and other institutional price increases."
"Also, Japanese media have reported that since the beginning of the new fiscal year in April, processed food manufacturers and other producers have moved aggressively to pass the effects of weak yen-led cost push inflation on to their final product prices. Such developments could bring upside surprises on inflation in coming months and contribute to a rebound in survey- and market-based measures of inflation expectations. "
Key Quotes:
"Our Tokyo-based economists expect that the BOJ will stay on hold with QQE and maintain its bullish stance on growth and prices, with only a slight downward revision to the FY2015 outlook. In their opinion, the BOJ is likely to make a further cut in the price outlook for FY2015 (when the 2% inflation target was meant to be met) in July when further easing could also be announced."
"That said, they also note that there is great uncertainty around the price outlook due to the recent stronger-than-expected pickup in oil prices and a surcharge associated with the renewable energy purchasing scheme and other institutional price increases."
"Also, Japanese media have reported that since the beginning of the new fiscal year in April, processed food manufacturers and other producers have moved aggressively to pass the effects of weak yen-led cost push inflation on to their final product prices. Such developments could bring upside surprises on inflation in coming months and contribute to a rebound in survey- and market-based measures of inflation expectations. "