BoJ: Expect further easing despite various doubts – Nomura

Research Team at Nomura, suggests that doubts remain about the likelihood of additional BoJ easing in July even though this has been heavily factored in by the markets

Key Quotes

“The markets have heavily factored in the likelihood of additional easing when the BOJ holds its monetary policy meeting on 28–29 July, as shown by the fall in JGB yields in particular. However, some doubts remain as to whether the BOJ will ease further in July.

We currently expect the BOJ to decide to implement additional easing by (1) cutting the policy interest rate (from -0.1% to -0.2%), (2) moving interest rates on its loan support operations into negative territory (from 0.0% to -0.1%), and (3) doubling its ETF and REIT purchases (to ¥6trn and ¥180bn respectively).”