Economists say next move from BOJ will be a step toward exit – but not soon

Reuters polling, reporting

  • 37 of 41 economists say the Bank of Japan’s next policy move will be steps toward unwinding stimulus
  • 13 of 37 economists say they have pushed back the expected timing for BOJ steps toward stimulus unwind
  • Chance of a global trade war has increased in last month, say half of 34 economists polled

Those pushing back further their timing for moves to the exit cite concern on yen strength and a still distant inflation target

“We pushed back our
forecast based on declining stocks and the yen’s rise since
early this year and Kuroda’s recent comments,” said
Tetsufumi Yamakawa, chief economist at Barclays Securities Japan.

(ps.  CPI data from Japan is due tomorrow)


The BOJ will maintain its short-term interest rate at minus 0.1 percent, according to the median of 52 economists, and keep its 10-year government bond yield target at around zero percent until at least the end of 2019

  • Thirteen economists forecast the central bank would taper its easy monetary policy during the first half of 2019 and seven think that would happen in the latter half of next year, the poll found
  • 11 project sometime in 2020 or later
  • five economists forecast that would happen this year
  • One did not expect it this year but gave no other timeframe

The BOJ is also unlikely to change policy this year because it doesn’t want to “rock the boat” while Japan faces two key political decisions: whether to proceed with a sales tax hike in October 2019 and a ruling party leadership election in September, said Hiroaki Mutou, chief economist at Tokai Tokyo Research Institute.

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