FXstreet.com (Barcelona) - Merrill Lynch analysts expect the BoJ to ease once or twice more over the second half of 2012: to avoid Yen strengthening as the central banks in the US and Europe carry out additional easing measures; to act against softer inflation forecasts as two economists were added in the discussion as Policy Board members, with expectations of more conservative forecasts; with political pressures on minimizing deflationary pressure after the bill to raise the rate of consumption tax to be approved by the Diet.
“In term of the timing of the next round of easing, one key determinant will be the direction of the foreign exchange market, but depending on the US employment statistics and FRB policy we believe two potential opportunities could be at the time of the August Policy Board meeting (8-9 August) or the September meeting (18-19 September)”, wrote Masayuki Kichikawa, economist at Merrill Lynch, expecting extension of the treasury bond purchase scheme by ¥5-10 tn.
“In term of the timing of the next round of easing, one key determinant will be the direction of the foreign exchange market, but depending on the US employment statistics and FRB policy we believe two potential opportunities could be at the time of the August Policy Board meeting (8-9 August) or the September meeting (18-19 September)”, wrote Masayuki Kichikawa, economist at Merrill Lynch, expecting extension of the treasury bond purchase scheme by ¥5-10 tn.
