JPY: Expect BOJ Easing this Week – Goldman Sachs

JPY: Expect BOJ Easing this Week – Goldman Sachs

26 April 2016, 13:22
Roberto Jacobs

JPY: Expect BOJ Easing this Week – Goldman Sachs

Research Team at Goldman Sachs, notes that the BOJ is due to hold its next policy meeting on April 27-28 and they think the BOJ is likely to decide on further easing action this week, centered on additional ETF purchases.

Key Quotes

“Given the rising risk that business confidence has been dented by recent financial market instability and the Kumamoto earthquakes, and in view of BOJ governor Haruhiko Kuroda’s recent proactive statements on possible additional easing in response to the sharp deceleration in inflation in April. We also see a possibility of a cut in the loan rate in its loan support program.

We expect March national core CPI to fall to -0.2% yoy, due to lower electricity charges and gasoline prices. For March national core-core CPI we forecast a flat print at +0.8% in the absence of large price movements other than energy prices. We forecast April Tokyo core CPI will come in at -0.4% yoy (March -0.3%).

We expect March production to rise +2.5% mom, showing a partial recovery from the large -5.2% decline in February that was impacted by special factors including temporary closure of a major auto plant.”


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