HALISTER1: BOJ to Cut Rates, Increase QE; Reiterate Can Do More: ABN Amro

BOJ to Cut Rates, Increase QE; Reiterate Can Do More: ABN Amro

(Bloomberg) -- Expect the BOJ to step up monetary stimulus, but not in an aggressive way, ABN Amro senior economist Maritza Cabezas writes in a client note.
  • BOJ communication to be “strong” on what the central bank can do, but more modest on what it really will do
  • ABN Amro expects a rate cut to -0.2% and an increase in the asset purchase target to JPY85t-JPY90t annually
  • BOJ efforts to explain and evaluate the current approach are welcome, as Japan inflation on all measures continues to trend down amid concerns over monetary policy effectiveness
  • Longer term, effective monetary policy will also require labor market reforms and a credible fiscal plan
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Maritza Cabezas (ABN AMRO Bank NV)

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