BOJ Likely to Expand its Stimulus by June 2014

The Bank of Japan will expand its record easing by June next year as inflation remains distant from its 2 percent target, according to a survey of economists by Bloomberg News.

Twenty of 26 analysts expect more stimulus in the next 10 months, while all said the bank would keep policy on hold at a two-day meeting starting today. Consumer prices excluding fresh food, the BOJ’s preferred measure of inflation, rose 0.4 percent in June.

Koichi Hamada, a retired Yale University professor who advises Prime Minister Shinzo Abe on monetary policy, said today that Governor Haruhiko Kuroda should be prepared to add easing if the economy falters after a planned sales-tax increase in April. While the BOJ in July raised its assessment of the economy for a record seventh straight month, the increase in the levy and a slowdown in China, Japan’s largest trading partner, could threaten the revival.


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