Reuters Poll Shows BOJ Expected to Ease Further This Week

The Bank of Japan is expected to further ease its ultra-loose policies at this week’s meeting, a Reuters poll of economists found on Tuesday, as it struggles to overcome chronic stagnation and quell speculation that it is running out of options.

The economists polled Sept. 14-20 were largely split over whether the BOJ’s next move would be to cut its negative interest rate even deeper, or to ramp up or recalibrate its asset purchase program, or even do both.

The BOJ’s actions at its July meeting fell well short of market expectations, although it did announce the current review of the effects of its stimulus program.

Twenty-one of 31 economists in the poll said the BOJ would announce further easing on Wednesday, while six said the next move would be announced at the review on October 31-November 1. Four picked some time in 2017.

Asked what the BOJ might do next, two-thirds of those who forecast more stimulus being announced on Wednesday picked a further deepening of the minus 0.1 percent interest rate as a possibility.

But several of them said changes to the BOJ’s stimulus program, such as buying more Japanese government bonds, adjusting the maturities of bonds eligible for purchase, boosting spending on commercial paper, corporate debt and exchange traded funds, were also likely.

Four respondents said the BOJ would only tweak details of its money-printing program and would leave rates unchanged.

via Reuters

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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