23 Dec 2014
Little possibility of further BoJ easing in 2015 H1 – Nomura
FXStreet (Barcelona) - Research Analysts at Nomura do not expect further BoJ easing in 2015 even if the core CPI inflation rates comes down close to zero in Q2 2015.
Key Quotes
“We expect the crude oil price to hit the USD59 level temporarily in Jan-Mar 2015 before turning up and gradually rising. In tandem, we have slightly raised our forecast for Japan real GDP growth for FY15 from +2.1% to +2.2% and for FY16 from +1.5 to +1.6. The upward revision reflects prospects that consumers’ increased real purchasing power owing chiefly to lower crude oil prices will give a boost to the economy.“
“The revision to our crude oil price assumption feeds through to relatively large changes in the economic variables of the inflation rate and trade balance. For the core CPI inflation rate, we have lowered our FY15 forecast from +0.8% to +0.5%.”
“Even if the core CPI inflation rate comes down close to zero y-y in 2015 Q2, as we now project, we see little possibility of the BOJ adopting additional monetary easing in 2015 H1.”
“This view reflects (1) prospects of ongoing economic recovery supported by lower crude oil prices, (2) the view expressed by BOJ Governor Haruhiko Kuroda at a recent press conference that lower crude oil prices would be a factor pushing up the inflation rate in future, and (3) the likelihood that the BOJ will try to avoid using up all its ammunition.”
“We would, however, see a risk of additional easing if the inflation rate were to turn negative even temporarily.”
Key Quotes
“We expect the crude oil price to hit the USD59 level temporarily in Jan-Mar 2015 before turning up and gradually rising. In tandem, we have slightly raised our forecast for Japan real GDP growth for FY15 from +2.1% to +2.2% and for FY16 from +1.5 to +1.6. The upward revision reflects prospects that consumers’ increased real purchasing power owing chiefly to lower crude oil prices will give a boost to the economy.“
“The revision to our crude oil price assumption feeds through to relatively large changes in the economic variables of the inflation rate and trade balance. For the core CPI inflation rate, we have lowered our FY15 forecast from +0.8% to +0.5%.”
“Even if the core CPI inflation rate comes down close to zero y-y in 2015 Q2, as we now project, we see little possibility of the BOJ adopting additional monetary easing in 2015 H1.”
“This view reflects (1) prospects of ongoing economic recovery supported by lower crude oil prices, (2) the view expressed by BOJ Governor Haruhiko Kuroda at a recent press conference that lower crude oil prices would be a factor pushing up the inflation rate in future, and (3) the likelihood that the BOJ will try to avoid using up all its ammunition.”
“We would, however, see a risk of additional easing if the inflation rate were to turn negative even temporarily.”