Nope, not the BoJ - HSBC

Frederic Neumann, Co-head of Asian Economics Research at HSBC, explains that the Fed is doing it and the ECB may soon, but don’t count on the BoJ to start exiting its ultra-loose policy for the foreseeable future.

Key Quotes

“It matters for the rest of Asia: as others gently apply the brakes, Japan’s central bank at least provides a little buffer. Still, questions abound: the country’s upcoming general election might raise worries about the BoJ’s commitment. Plus, look closely, and monetary officials have already tapered their JGBs purchases.”

“All signs of an impending shift in policy? Nope. A premature end to the current stimulus would put at risk the small, though meaningful, gains already attained. Even the opposition agrees that the BoJ should stay its course for now.”

“Meanwhile, the framework of ‘yield curve control’ means that JGB purchases are no longer the measure by which the central bank’s stance should be judged. It’ll keep its foot firmly on the gas for a long time to come.”