Japanese Yen is trading lower on Thursday’s Asia session across the board. Market participants raise doubts, that the BOJ would take a more dovish stance at its next week’s meeting on Sep20-21. But some of the analysts expects BOJ likely to hold interest rates.
NOMURA reported in the Macro Economy note- expect no change in interest rates or purchase quantities, but new efforts to steepen yield curve.
We revise our outlook for the Bank of Japan’s 20-21 September monetary policy meeting based on comments from policy board members and Nikkei and other media reports since the Bank announced at the end of July that it plans a “comprehensive assessment” of its policies’ effectiveness. The details of our revisions are as follows.
・For interest rates, we think the BOJ will make no change to either the interest rate on the policy-rate balance portion of current accounts held by financial institutions at the BOJ or interest rates on loan support operations.
・We also think the BOJ will make no change to the quantity of JGB and other purchases.
・We now expect the BOJ to make fresh efforts to steepen the yield curve by removing the rule that limits the average remaining maturity of its JGB purchases to 7–12 years. Our forecasts had called for a shift to negative interest rates for its loan support operations for banks, and for shifting the quantity of its JGB purchases to a range of ¥70-90trn
JP Morgan chief economist Masaaki Kanno: Bank of Japan is likely to be negative interest rates fell to -0.3%. Bank of Japan to maintain the size of Japanese government bonds at 80 trillion yen.
Morgan Stanley economist team: Bank of Japan Possible options include “slightly expand” purchases of Japanese government bonds, one of the goals is to make many measures JGB yield curve becomes steeper.
Goldman Sachs: The Bank of Japan expected to remain unchanged in its policy framework for monetary policy meeting in September, but may show a certain degree of flexibility in the purchase of Japanese government bonds, especially in the more than 25-year maturity date of the debt.
Honda Etsuro economic adviser, said the Bank of Japan may take measures to cope with the yen’s appreciation, to further expand the easing is possible, but not know in September, October, or the implementation of other times; the Bank of Japan to maintain the QE program has encountered difficulties, maybe buying foreign bonds. (Nikkei)
Image source: Bigstock