FXstreet.com (Barcelona) - The ongoing improvement in risk sentiment is resulting in the modest weakening of safe haven currencies such as the yen and US dollar. Yen weakness is also reflecting building expectations of further monetary easing from the BoJ. According to people close to the matter, Bloomberg is reporting that the BoJ will predict that it will miss its 1.0% inflation goal in the next two fiscal years when it releases its latest Economic Outlook and Prices report at the end of October, which will include for the first time the BoJ’s inflation projection for FY’14.
According to the BTMU Research Team, “We expect the report to provide justification for further monetary easing from the BoJ. The weakening pace of economic growth in Japan is also prompting the Japanese government to consider implementing additional fiscal stimulus by the end of the month.” The report claims that the extra budget could total several trillion yen if opposition parties cooperate, and is expected to include measures to curb deflation, ease strength in the yen, expand earthquake reconstruction work, and relax regulations on business.
According to the BTMU Research Team, “We expect the report to provide justification for further monetary easing from the BoJ. The weakening pace of economic growth in Japan is also prompting the Japanese government to consider implementing additional fiscal stimulus by the end of the month.” The report claims that the extra budget could total several trillion yen if opposition parties cooperate, and is expected to include measures to curb deflation, ease strength in the yen, expand earthquake reconstruction work, and relax regulations on business.
