30 Apr 2014
BOJ to keep policy unchanged - Nomura
FXStreet (Bali) - BOJ will maintain its current policy stance today, notes Yujiro Goto, FX Strategist at Nomura.
Key Quotes
"Steady core CPI inflation in April Tokyo and March nationwide’s data suggest the BOJ is unlikely to change its optimistic view on inflation momentum anytime soon. The BOJ has been reiterating that core inflation is likely to be around 1.25% for some time, and Governor Kuroda said some time means about six months in his press conference in January."
"Even though inflation data released last week were a bit weaker than consensus, the BOJ is likely to judge the economy is still on track to achieve its inflation target. Thus, the BOJ is likely to leave its policy unchanged on Wednesday, with just minor changes in the inflation forecast, if any."
"Market expectations for a near-term BOJ easing have decreased further, according to Bloomberg. Only one BOJ watcher out of 35 expects the BOJ to ease today, while four expected an easing just three weeks ago. Changes in inflation forecasts are likely to be minor, if any. USDJPY could still decline after the BOJ's likely decision to leave its policy unchanged, but the dip is likely to be small."
"As there are more G10 events after the BOJ meeting (US Q1 GDP, the FOMC meeting, the April eurozone CPI, the US's NFP, etc), the market focus is likely to shift non-Japan events swiftly."
Key Quotes
"Steady core CPI inflation in April Tokyo and March nationwide’s data suggest the BOJ is unlikely to change its optimistic view on inflation momentum anytime soon. The BOJ has been reiterating that core inflation is likely to be around 1.25% for some time, and Governor Kuroda said some time means about six months in his press conference in January."
"Even though inflation data released last week were a bit weaker than consensus, the BOJ is likely to judge the economy is still on track to achieve its inflation target. Thus, the BOJ is likely to leave its policy unchanged on Wednesday, with just minor changes in the inflation forecast, if any."
"Market expectations for a near-term BOJ easing have decreased further, according to Bloomberg. Only one BOJ watcher out of 35 expects the BOJ to ease today, while four expected an easing just three weeks ago. Changes in inflation forecasts are likely to be minor, if any. USDJPY could still decline after the BOJ's likely decision to leave its policy unchanged, but the dip is likely to be small."
"As there are more G10 events after the BOJ meeting (US Q1 GDP, the FOMC meeting, the April eurozone CPI, the US's NFP, etc), the market focus is likely to shift non-Japan events swiftly."