Difficult for core-CPI to accelerate – BOJ’s Kiuchi

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 3, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - Bank of Japan (BOJ) board member Takahide Kiuchi was on the wires last minutes, noting that the Japanese economy remains exposed to external headwinds. Mr. Kiuchi also said that he doesn’t think that the economy is in recession and warned that longer period of accommodative policy will have increased side-effects on growth prospects.

    Key Quotes:

    Wholesale prices expected to continue falling for time being due to commodity prices

    Consumer prices likely to be around zero for time being due to Oil prices

    Economy likely to emerge from recent pause, grow above potential in FY 2016

    Don’t think Japan's economy is in recession

    Overseas economies are major downside risk for Japan

    July-Sept GDP could turn out to be positive

    Sharp drop in exports to hurt capex, jobs

    Expect capex to peak out in FY 2017 given current growth expectations

    See increasing risk Japan investors will want to hold more JGBs, which could make BOJ's quantitative easing more difficult

    If long term rates rise due to worries about BOJ's JGB purchases, impact could be serious

    Worries about BOJ's balance sheet could be negative for currency stability

    Difficult for core-CPI to accelerate from here on

    Not optimistic about next year's wage negotiations
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