29 Apr 2016
BoJ: Expectations for June easing are likely to sustain – Nomura
Research Team at Nomura, notes that the BOJ left policy unchanged, while market expectations for easing were high.
Key Quotes
“The Bank decided to introduce a JPY300bn funds-supplying operation for financial institutions in disaster areas affected by Kumamoto Earthquake. Apart from this operation, there were no new measures at this meeting, although market expectations for a rate cut on the loan support programme have recently risen.
The recent recovery in Japanese equity prices and USD/JPY likely encouraged the BOJ to stay on the sidelines for now to evaluate the efficacy of its negative rate policy. In addition, the Bank may judge that a June or later timing of easing would be better, as Japan is going to host the G7 summit meeting in May.
After yesterday’s disappointment, there will likely be concerns over the limitations of BOJ policy options, although we believe further easing is likely as early as in June. It will be important for Governor Kuroda to ease any concerns over the limits of BOJ easing to avoid further depreciation of USD against JPY.”
Key Quotes
“The Bank decided to introduce a JPY300bn funds-supplying operation for financial institutions in disaster areas affected by Kumamoto Earthquake. Apart from this operation, there were no new measures at this meeting, although market expectations for a rate cut on the loan support programme have recently risen.
The recent recovery in Japanese equity prices and USD/JPY likely encouraged the BOJ to stay on the sidelines for now to evaluate the efficacy of its negative rate policy. In addition, the Bank may judge that a June or later timing of easing would be better, as Japan is going to host the G7 summit meeting in May.
After yesterday’s disappointment, there will likely be concerns over the limitations of BOJ policy options, although we believe further easing is likely as early as in June. It will be important for Governor Kuroda to ease any concerns over the limits of BOJ easing to avoid further depreciation of USD against JPY.”