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Japan : BoJ preview − Been there, done that!
Thu, Dec 18 2008, 09:11 GMT
by Flemming J. Nielsen
Danske Bank A/S
We now expect the Bank of Japan (BoJ) to cut its leading O/N target rate by 20bp to 0.1% on Friday when the BoJ announces its interest rate decision following this week's monetary policy meeting. While a smaller 10-15bp interest rate cut cannot be ruled out, the message will be the same: the O/N target rate will be allowed to decline close to zero and will no longer be the main monetary instrument. Hence, focus will now shift towards new BoJ measures to improve the monetary policy transmission mechanism. Options include outright purchases by the BoJ of government bonds, commercial papers or even stocks.
Published on
Thu, Dec 18 2008, 09:12 GMT
Danske Bank
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