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16 Dec 2014
Kuroda’s view on inflation expectations to watch – Nomura
FXStreet (Barcelona) - Yujiro Goto, Research Analyst at Nomura expects BoJ to leave its policy unchanged this week, but notes that Kuroda’s view on oil decline and its impact on inflation expectations are worth watching.
Key Quotes
“We expect the BOJ to leave its policy unchanged this week (18-19 December).”
“After excluding the impact of the consumption tax hike, core CPI inflation undercut 1.0% in October (+0.9%) for the first time since October 2013. However, Governor Kuroda acknowledged the possibility of below-1% inflation in the near future at his previous press conference and thus, the weak inflation result is unlikely to lead to further easing this month.”
“We think BOJ board members are likely to want to stay on the sidelines to evaluate the impact of the latest easing on the economy and inflation.”
“Governor Kuroda’s view on the latest oil price developments and its impact on inflation expectations are worth monitoring at his press conference on 19 December.”
“When the BOJ embarked on expanding its QQE programme on 31 October, Governor Kuroda emphasised that there would be a risk that the past steady pace of changes in deflation expectations would slow, if downside pressures on inflation persist, even from the fall in oil prices.”
“Bloomberg reported last Friday that the BOJ rejected the idea that additional monetary stimulus will be needed to avoid a deceleration in inflation owing to a decline in oil prices, quoting unnamed people familiar with the discussions. There may not be a clear consensus on this issue among the BOJ board members, but Governor Kuroda‟s view is important.”
Key Quotes
“We expect the BOJ to leave its policy unchanged this week (18-19 December).”
“After excluding the impact of the consumption tax hike, core CPI inflation undercut 1.0% in October (+0.9%) for the first time since October 2013. However, Governor Kuroda acknowledged the possibility of below-1% inflation in the near future at his previous press conference and thus, the weak inflation result is unlikely to lead to further easing this month.”
“We think BOJ board members are likely to want to stay on the sidelines to evaluate the impact of the latest easing on the economy and inflation.”
“Governor Kuroda’s view on the latest oil price developments and its impact on inflation expectations are worth monitoring at his press conference on 19 December.”
“When the BOJ embarked on expanding its QQE programme on 31 October, Governor Kuroda emphasised that there would be a risk that the past steady pace of changes in deflation expectations would slow, if downside pressures on inflation persist, even from the fall in oil prices.”
“Bloomberg reported last Friday that the BOJ rejected the idea that additional monetary stimulus will be needed to avoid a deceleration in inflation owing to a decline in oil prices, quoting unnamed people familiar with the discussions. There may not be a clear consensus on this issue among the BOJ board members, but Governor Kuroda‟s view is important.”