Bank of Japan Governor Haruhiko Kuroda may have dismissed the chances of further monetary easing on Tuesday, but his remarks seemingly fell on deaf ears as strategists continue to bet on stimulus as early as October.
The former Asian Development Bank president said he expected Japan’s inflation rate to accelerate considerably and finally hit the central bank’s target of 2 percent in the first half of fiscal 2016. This improvement in price pressures makes quantitative easing (QE) unnecessary at this time, he warned.
But nobody seems to believe him.
“Kuroda has made these type of comments before, so we’re not too taking it too seriously. Instead of rhetoric, fundamentals are more important and we’re still expecting QE in October, especially in the wake of recent China weakness,” said Saktiandi Supaat, Maybank’s head of global FX strategy, in a phone interview.