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22 May 2015
BoJ provides more upbeat assessment of Japanese economy – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, reviews today’s BoJ policy decision and Kuroda’s statement, and further notes that the upbeat assessment of the economy suggests less risk of any further easing by the central bank in the near-term.
Key Quotes
“The BoJ stated that the Japanese economy continued to recover moderately supported by a pick-up in exports, a moderate increasing trend in business fixed investment, and resilient private consumption. The BoJ also noted that housing investment has shown signs of picking up. In contrast, public investment was now described as having entered a moderate declining trend.”
“The release earlier this week of the stronger than expected Japanese GDP report for Q1 has provided some reassurance for the BoJ although the pace of expansion was flattered by a large inventory build with some payback likely in the current quarter.”
“The BoJ’s more upbeat assessment of the Japanese economy further reduces the probability of additional monetary easing in the near-term.”
“The BoJ’s assessment and outlook for inflation remains unchanged. The BoJ remains optimistic that inflation will accelerate in the second half of this year as the negative impact from lower energy begins to fade. Inflation will likely have to disappoint the BoJ’s expectations to prompt further easing which is seen as most likely to be delivered in October.”
“In the accompanying press conference, Governor Kuroda reiterated that the BoJ still sees inflation reaching their 2.0% target in around the 1H FY2016. He added that the BoJ has a slightly better view on the economy after the GDP report for Q1.”
“The increasing strength of private consumption is expected to be supported further by the positive results from the Shunto pay talks becoming evident from June. He is also not overly worried by the recent inventory build.”
Key Quotes
“The BoJ stated that the Japanese economy continued to recover moderately supported by a pick-up in exports, a moderate increasing trend in business fixed investment, and resilient private consumption. The BoJ also noted that housing investment has shown signs of picking up. In contrast, public investment was now described as having entered a moderate declining trend.”
“The release earlier this week of the stronger than expected Japanese GDP report for Q1 has provided some reassurance for the BoJ although the pace of expansion was flattered by a large inventory build with some payback likely in the current quarter.”
“The BoJ’s more upbeat assessment of the Japanese economy further reduces the probability of additional monetary easing in the near-term.”
“The BoJ’s assessment and outlook for inflation remains unchanged. The BoJ remains optimistic that inflation will accelerate in the second half of this year as the negative impact from lower energy begins to fade. Inflation will likely have to disappoint the BoJ’s expectations to prompt further easing which is seen as most likely to be delivered in October.”
“In the accompanying press conference, Governor Kuroda reiterated that the BoJ still sees inflation reaching their 2.0% target in around the 1H FY2016. He added that the BoJ has a slightly better view on the economy after the GDP report for Q1.”
“The increasing strength of private consumption is expected to be supported further by the positive results from the Shunto pay talks becoming evident from June. He is also not overly worried by the recent inventory build.”