Ex-BOJ Official sees USD/JPY at 100

The yen will rally to 100 per dollar in the first half of next year because the Bank of Japan won’t be able to expand monetary easing by enough to repeat this year’s success, a former central bank official said.

The so-called Kuroda Shock in April set off the yen’s biggest drop since October 2008 and pushed 10-year yields to a record low after BOJ Governor Haruhiko Kuroda pledged to double the monetary base to achieve a 2 percent inflation target. The central bank won’t be able to spring a similar surprise on the market next year, said Tohru Sasaki, who worked at the central bank from 1992 to 2003 and is now JPMorgan’s Tokyo-based head of Japan rates and currency research.

“Next time the BOJ can’t beat market expectations,” he said in an interview on Dec. 5. “It’s already done so much.”  Kuroda will increase total debt buying by 10 trillion yen ($97 billion) for the 12 months ending March 31, 2015, from the current pace of 7 trillion yen a month, at the BOJ’s April 30 meeting, JPMorgan predicts. He will double purchases of exchange-traded funds to 2 trillion yen a year, JPMorgan says. Nineteen economists in a Bloomberg News poll in October said the BOJ will add stimulus in the second quarter of next year, with seven saying it will ease in the July-September period.


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