18 Feb 2015
Expectations for near-term BOJ easing inch down - Nomura
FXStreet (Bali) - Yujiro Goto, FX Strategist at Nomura, notes that expectations for near-term BOJ easing among BOJ watchers inched down in February, according to Bloomberg.
Key Quotes
"Expectations for near-term BOJ easing among BOJ watchers inched down in February, according to Bloomberg. Although 27% of BOJ watchers expected the BOJ to ease by end-April in January, only 20% now expect the Bank to ease by then. The survey was conducted after the Bloomberg report on possible changes in the BOJ's view on JPY weakness and further monetary easing on Thursday, which may have led to a further decline in near-term monetary easing. A survey conducted earlier (27 January to 3 February) by JCER also shows a decline in near-term easing expectations for the BOJ. Both surveys now show no expectations for BOJ easing in February and March."
"As market expectations for near-term easing have fallen, the possibility of disappointment by the BOJ is likely limited on Wednesday. Even though the BOJ is likely to remain relatively optimistic on inflation and inflation expectations, Governor Kuroda is unlikely to emphasize the side-effects of easing, unlike some BOJ officials in media articles."
"The Q4 real GDP growth rate released today was positive for the first time in three quarters, but the recovery was weaker at +2.2% (saar) than consensus expectations (+3.7%). Two consecutive quarter increases in real exports are encouraging for the economy, but the recovery in both consumption and capex was slightly weaker, which would make it difficult for Governor Kuroda to be overly hawkish. The latest positioning data show JPY short positions have declined further, which will also limit the downside risk of USD/JPY after the BOJ meetings.
"We still see more upside risks than downside risks for USD/JPY, and recommend positioning for further JPY weakness into BOJ meeting and key Fed events."
Key Quotes
"Expectations for near-term BOJ easing among BOJ watchers inched down in February, according to Bloomberg. Although 27% of BOJ watchers expected the BOJ to ease by end-April in January, only 20% now expect the Bank to ease by then. The survey was conducted after the Bloomberg report on possible changes in the BOJ's view on JPY weakness and further monetary easing on Thursday, which may have led to a further decline in near-term monetary easing. A survey conducted earlier (27 January to 3 February) by JCER also shows a decline in near-term easing expectations for the BOJ. Both surveys now show no expectations for BOJ easing in February and March."
"As market expectations for near-term easing have fallen, the possibility of disappointment by the BOJ is likely limited on Wednesday. Even though the BOJ is likely to remain relatively optimistic on inflation and inflation expectations, Governor Kuroda is unlikely to emphasize the side-effects of easing, unlike some BOJ officials in media articles."
"The Q4 real GDP growth rate released today was positive for the first time in three quarters, but the recovery was weaker at +2.2% (saar) than consensus expectations (+3.7%). Two consecutive quarter increases in real exports are encouraging for the economy, but the recovery in both consumption and capex was slightly weaker, which would make it difficult for Governor Kuroda to be overly hawkish. The latest positioning data show JPY short positions have declined further, which will also limit the downside risk of USD/JPY after the BOJ meetings.
"We still see more upside risks than downside risks for USD/JPY, and recommend positioning for further JPY weakness into BOJ meeting and key Fed events."