JPY: Tankan survey to have neutral policy impact - MUFG

Lee Hardman, Currency Analyst at MUFG, notes that the yen has been little changed by the release overnight of the latest Tankan survey for Q3 which revealed that business confidence amongst large manufacturers and non-manufacturers remained relatively stable.

Key Quotes

“Large manufacturers continue to remain optimistic expecting the yen to weaken from current levels assuming USD/JPY will average 107.92 in FY2016, and 107.42 in the second half of the fiscal year. The results from the survey are not expected to have a material impact on the BoJ’s outlook for the economy and subsequently monetary policy.

The stronger yen continues to complicate the BoJ’s attempts to lift both actual and expected inflation keeping pressure on the BoJ to deliver further stimulus. However, it has been clear this year that there is now a high hurdle for the BoJ to re-weaken the yen.”