Economists now split over BOJ's next move – Reuters poll

The latest Reuters poll showed that the economists are divided over the Bank of Japan’s (BOJ) next monetary policy move amid growing concerns over the Japanese economic outlook.

Key Findings:

“With the U.S.-China trade war hurting global growth, the yen gaining and the U.S. Federal Reserve likely to cut interest rates, half the analysts polled June 5-17 said the BOJ’s next step would be to ease even further.

Asked what the BOJ’s next move would be, 20 of 39 economists polled said it would adopt more stimulus steps, while 19 said it would tighten.

It’s the first-time analysts have been split on the question since the February 2017 poll.

17 economists said the BOJ would tweak its forward guidance wording, which says it will maintain its current extremely low level of interest rates “at least through around the spring of 2020.

Seven economists predicted the BOJ would increase buying exchange-traded funds, or ETFs, and Japan real estate investment trusts, or J-REITs, and a few said the bank would lower negative interest rates even further.  

Asked what dollar/yen rate would trigger further BOJ easing, 28 of 36 economists selected “beyond 100 yen,” four chose “beyond 103 yen,” three said “beyond 105 yen”.  

Japan’s economy as a whole will grow 0.6% in the current fiscal year to March 2020, although it is expected to shrink an annualized 1.9% in the fourth quarter due to a planned sales tax hike in October.”