1 May 2014
BOJ is excessively optimistic on macroeconomic supply-demand balance - Nomura
FXStreet (Bali) - In view of Shuichi Obata and Tomo Kinoshita, Economists at Nomura, the BOJ is excessively optimistic on macroeconomic supply-demand balance.
Key Quotes
"The BOJ's outlook for the economy and prices was no surprise as it was broadly in line with prior media reports. However, its view on the supply-demand balance gives a strong impression of being slightly optimistic compared with the market's (including our) stance."
"On this point, Governor Kuroda said that the supply-demand balance was not calculated using the traditional approach based on potential GDP but using a more pragmatic approach of directly estimating the utilization of production factors (labor and capital). He refrained from actively saying that the potential growth rate as estimated by the BOJ was declining."
Key Quotes
"The BOJ's outlook for the economy and prices was no surprise as it was broadly in line with prior media reports. However, its view on the supply-demand balance gives a strong impression of being slightly optimistic compared with the market's (including our) stance."
"On this point, Governor Kuroda said that the supply-demand balance was not calculated using the traditional approach based on potential GDP but using a more pragmatic approach of directly estimating the utilization of production factors (labor and capital). He refrained from actively saying that the potential growth rate as estimated by the BOJ was declining."