27 May 2014
More BoJ stimulus coming, but when? - BBH
FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explains they have argued that if more stimulus is forthcoming, it is unlikely to be as early as the market expects (by the end of July).
Key Quotes
"Japan has the most top tier data on tap in the days ahead. It includes retail sales, industrial output, and CPI figures."
"However, broad weakness is widely expected in the real economy while the retail sales tax will likely double the pace of Japanese inflation. The BOJ will seek to look past the distortion created by the tax to discern the true inflation trends."
"It will be important to gauge how the economy is doing relative to the BOJ's expectations, and it will take more than a month of high frequency data. The BOJ has leaned against widespread expectations of more stimulus."
"We have argued that if more stimulus is forthcoming, it is unlikely to be as early as the market expects (by the end of July). Moreover, if there is some disappointment, a supplemental budget in the second half of the fiscal year is possible. In addition, we suspect there will be a growing call to delay the next year's second part of the sales tax increase. "
Key Quotes
"Japan has the most top tier data on tap in the days ahead. It includes retail sales, industrial output, and CPI figures."
"However, broad weakness is widely expected in the real economy while the retail sales tax will likely double the pace of Japanese inflation. The BOJ will seek to look past the distortion created by the tax to discern the true inflation trends."
"It will be important to gauge how the economy is doing relative to the BOJ's expectations, and it will take more than a month of high frequency data. The BOJ has leaned against widespread expectations of more stimulus."
"We have argued that if more stimulus is forthcoming, it is unlikely to be as early as the market expects (by the end of July). Moreover, if there is some disappointment, a supplemental budget in the second half of the fiscal year is possible. In addition, we suspect there will be a growing call to delay the next year's second part of the sales tax increase. "