Dovish BOJ expectations fall sharply – Reuters poll

The latest Reuters poll revealed a major shift in the monetary policy outlook of the Bank of Japan’s (BOJ), mainly in response to signs of easing US-China trade tensions and the recent Yen’s strength.

Key Findings:

“The survey, taken Nov. 6-12, found that 23 of 41 economists, or 56%, expect the BOJ’s next step will be further easing, down sharply from 85% in last month’s poll.

By contrast, 18 economists, or 44%, believe unwinding stimulus will be the BOJ’s next course of action, a dramatic jump from just six economists in the previous survey.

All 18 said the BOJ’s unwinding of stimulus would come in 2021 or later.

Those who expect further easing forecast a wide range of timelines, including four saying said it could happen as early as December and seven saying not until at least 2021.

Asked what dollar/yen level would prompt the BOJ to ease further, about 67% of the economists said when the yen strengthened beyond 100 yen against the dollar.”

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