Bank of Japan Monetary Policy Expected to Remain Unchanged

At its two-day policy meeting starting Tuesday, the Bank of Japan is expected to maintain its fiscal 2015 target for beating deflation, as it believes the economy will continue to recover even after a sales tax hike in April, sources close to the matter said.

At the meeting, the central bank will review its semiannual economic outlook issued in October, which projects the core consumer price index excluding fresh foods rising 1.9 percent in fiscal 2015.

The BOJ will also likely decide to keep intact its ultraeasy monetary policy introduced last April, but note that it will consider additional easing steps in case the economy falters, the sources said.

But there are some members of the BOJ policy board and other officials who think the central bank should avoid further easing if possible, arguing changing the current stance of not taking steps incrementally could lead to confusion in financial markets, they said.

The BOJ is also expected to maintain its economic assessment that the domestic economy is “recovering moderately” on the back of solid domestic demand.

via Mainichi

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza