15 Jul 2014
No surprises from the BoJ – Danske Bank
FXStreet (Edinburgh) - The BoJ acted in line with market expectations in today’s policy meeting, commented Lars Christensen, Chief Analyst at Danske Bank.
Key Quotes
“Bank of Japan (BoJ) as expected did not announce any new easing measures in connection with today’s monetary meeting”.
“Specifically the target for the expansion of the monetary base (the main policy instrument) was left unchanged at JPY60-70trn”.
“The statement from the meeting was virtually unchanged compared with the meeting in June, which implies that BoJ still believes that the Japanese economy will be able to weather the April hike in the consumption tax and that GDP growth will again be above trend in Q3 after a modest contraction in Q2”.
“Regarding inflation, BoJ still believes it will be able to reach its 2% price stability target at some stage in late 2015 or early 2016”.
“BoJ’s forecast for GDP growth in fiscal year (FY) 2014 starting in April 2014 was revised marginally lower to 1.0% from previously 1.1%. BoJ’s forecast for GDP growth in FY 2015 was left unchanged at 1.5%”.
“BoJ left its inflation forecast (excluding impact from indirect tax hike) unchanged at 1.3% for FY 2014, 1.9% in FY 2015 and 2.1% in FY 2016”.
“Data released since the last meeting in June have been mixed but are still consistent with a contraction in GDP in Q2 and return to moderate growth in Q3”.
“However, in the coming months it will be status quo from BoJ and we are unlikely to see any easing measures unless the JPY for some reason appreciates markedly. Hence, there is unlikely to be any impetus for a weaker JPY from Japan’s monetary policy in the short run”.
Key Quotes
“Bank of Japan (BoJ) as expected did not announce any new easing measures in connection with today’s monetary meeting”.
“Specifically the target for the expansion of the monetary base (the main policy instrument) was left unchanged at JPY60-70trn”.
“The statement from the meeting was virtually unchanged compared with the meeting in June, which implies that BoJ still believes that the Japanese economy will be able to weather the April hike in the consumption tax and that GDP growth will again be above trend in Q3 after a modest contraction in Q2”.
“Regarding inflation, BoJ still believes it will be able to reach its 2% price stability target at some stage in late 2015 or early 2016”.
“BoJ’s forecast for GDP growth in fiscal year (FY) 2014 starting in April 2014 was revised marginally lower to 1.0% from previously 1.1%. BoJ’s forecast for GDP growth in FY 2015 was left unchanged at 1.5%”.
“BoJ left its inflation forecast (excluding impact from indirect tax hike) unchanged at 1.3% for FY 2014, 1.9% in FY 2015 and 2.1% in FY 2016”.
“Data released since the last meeting in June have been mixed but are still consistent with a contraction in GDP in Q2 and return to moderate growth in Q3”.
“However, in the coming months it will be status quo from BoJ and we are unlikely to see any easing measures unless the JPY for some reason appreciates markedly. Hence, there is unlikely to be any impetus for a weaker JPY from Japan’s monetary policy in the short run”.