BOJ preview: March pause, April easing - RBS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    RBS base case is for the BOJ to keep its asset purchases and new negative policy rate unchanged (70% probability) today.

    Key Quotes

    "The BoJ could cut its deposit rate further but will only have had limited time to assess its new policy (10% probability)."

    "The BoJ could also expand the amount of bank reserves facing its new 10bps charge from just ¥10trn (10% probability)."

    "Last, the BoJ could raise its ¥80trn a year of bond buying to show it hasn’t hit limits on its asset purchases (10% probability)."

    "We expect the BoJ to pause this month and instead ease on April 28 when it meets after the Federal Reserve next month."

    "Thus we would buy any post-meeting dollar-yen dip this month and target a move from 110-115 back to 115-120 in Q2’16."
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