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27 Nov 2013
Flash: Yen weakness on BoJ member comments - BTMU
FXstreet.com (London) - Derek Halpenny, strategist at The Bank of Tokyo-Mitsubishi UFJ noted the comments from BOJ MPC member Sayuri Shirai made overnight.
Key Quotes:
“comments from BOJ MPC member Sayuri Shirai are worth noting”.
“In a speech to business leaders in Tokushima city, she stated that the BOJ would find it difficult to reach its 2% inflation target and that the risks were clearly to the downside, which may require the BOJ to ease its monetary stance again in order to maintain credibility”.
“Of course, Shirai is a known dove and has expressed these views before and hence these comments are unlikely to influence market expectations now”.
“However, her dovish views are gaining credibility and while she is not arguing for easing now, her stance will probably become more influential in 2014 when
it is clear that the 2% target will not be achieved in the two-year time
horizon”.
“The belief of additional BOJ easing in 2014 will be important in keeping the yen on a weaker footing. The most plausible timing on any easing is probably Q2 in or around the time the sales tax is increased from 5% to 8% in April, which also coincides with the release of the latest BOJ projections in the semi-annual report on the outlook for the economy and prices”.
Key Quotes:
“comments from BOJ MPC member Sayuri Shirai are worth noting”.
“In a speech to business leaders in Tokushima city, she stated that the BOJ would find it difficult to reach its 2% inflation target and that the risks were clearly to the downside, which may require the BOJ to ease its monetary stance again in order to maintain credibility”.
“Of course, Shirai is a known dove and has expressed these views before and hence these comments are unlikely to influence market expectations now”.
“However, her dovish views are gaining credibility and while she is not arguing for easing now, her stance will probably become more influential in 2014 when
it is clear that the 2% target will not be achieved in the two-year time
horizon”.
“The belief of additional BOJ easing in 2014 will be important in keeping the yen on a weaker footing. The most plausible timing on any easing is probably Q2 in or around the time the sales tax is increased from 5% to 8% in April, which also coincides with the release of the latest BOJ projections in the semi-annual report on the outlook for the economy and prices”.