The flow of news from Japan in the last month is very powerful.
It all began on October 31 when the State Pension Investment Fund (GPIF) Japan revised the structure of its assets - in particular, increased the proportion of foreign stocks in its portfolio from 12% to 25%. On the same day the Bank of Japan unexpectedly expanded its program of quantitative easing to 60-70 trillion. yen to 80 trillion. yen per year.
Meanwhile, the country of the rising sun continued to receive all new messages. Released last week, a report on the Japanese GDP for the third quarter made a painful impression, reflecting the transition economies of the world in the third technical recession. The government was forced to respond to these statistics is postponed to a later date the next increase of the sales tax. Opponents of the current Prime Minister Shinzo Abe talking about the collapse of its economic policy - the so-called "Abenomics." In response, Prime Minister announced early parliamentary elections, the opposition to demonstrate that Japan's population still trust the government and gives him a mandate for the further implementation of programs to combat deflation and accelerating economic growth. Against this background, the Japanese central bank's November meeting, at which monetary policy was left unchanged, passed almost unnoticed.
For the Japanese yen, these events have become a real hit. In USD / JPY pair started a new "wave" of growth and investment banks hastily revised its forecast to increase at the exchange rate of the Japanese currency. In particular, Goldman Sachs in early November, has raised its forecast for the next six months from 112 to 118 yen per dollar. But life has shown that even such a major revision was too cautious, less than a month, as the dollar approached the level of 119 yen. Before December 1, could be reached level 120, and in fact, Goldman had expected yield on this mark only a year! .. Obviously, forecasts again in urgent need of revision.
Pollsters predict that as a result of early elections, the ruling party will not only remain in power, but also increase the number of seats in the lower house of parliament. Well, with the support of the electorate, Abe will receive a carte blanche for further aggressive promotion of economic growth. So, it is likely we have another extension of quantitative easing from the Bank of Japan. And then the pair USD / JPY to a level of 125 yen to the dollar we will see in the next year rather than in late 2016, as forecast in Goldman. To the author Sergey Glushkov
