BOJ’s Kuroda: It's possible for BOJ to deepen negative rates beyond -0.1%.

Dhwani Mehta FXStreet

In his speech before the parliament, the Bank of Japan (BOJ) Governor Kuroda further noted: “I never said BOJ can cut rates unlimitedly and that BOJ has unlimited ammunition to ease “.

Additional Comments:

Very few at BOJ believe BOJ cannot deepen negative rates beyond -0.1%.

It's possible for BOJ to deepen negative rates beyond -0.1%.

BOJ must weigh the benefits, costs of policy in mulling further easing.

There are still JGBs left in markets BOJ can buy.

There is plenty of room to deepen negative rates.

BOJ has various means to ease policy, can combine them or deploy an enhanced version of them.

Downturn in household spending after oct sales tax hike appears to be smaller than slump in spending after 2014 tax hike.

Stimulus effect of fiscal policy will be enhanced when central bank is promoting monetary easing to achieve its price target.

China's economy likely to sustain growth of around 6% in coming years, thanks in part to effect of policy measures.

In long run, China's economic growth may slow from 6% to around 5% or lower due partly to demographics.

Meanwhile, BOJ Governor Kuroda’s green signal to deepen negative rates is not boding well for the Yen, as USD/JPY recovers towards 108.70 region.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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