Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

In shift, economists now split over BOJ's next move - Reuters poll

share with twitter share with LinkedIn share with facebook
06/19/2019 | 01:33am EDT
FILE PHOTO: A security guard walks past in front of the Bank of Japan headquarters in Tokyo

TOKYO (Reuters) - In a shift reflecting growing concerns about Japan's economy, economists are now split over whether the central bank will next unwind - or further loosen - its ultra-easy monetary policy.

For more than two years, a majority of economists in a Reuters poll have said the Bank of Japan's next move would be to tighten the easy money taps with an eye to "normalizing" its policy.

But now, with the U.S.-China trade war hurting global growth, the yen gaining and the U.S. Federal Reserve likely to cut interest rates, half the analysts polled June 5-17 said the BOJ's next step would be to ease even further.

Should the Fed lower rates in coming months, that would likely boost the yen against the dollar, which hurts Japan's export-reliant economy.

"The BOJ is closely watching Fed policy and how that might impact the yen. If the yen jumps, the BOJ will have to take action," said Hiroaki Mutou, chief economist at Tokai Tokyo Research Institute.

Asked what the BOJ's next move would be, 20 of 39 economists polled said it would adopt more stimulus steps, while 19 said it would tighten.

It's the first time analysts have been split on the question since the February 2017 poll.

Among those predicting further easing, three each said it could happen in July, September or December, and four said in October. The rest said it would come in 2020 or beyond.

Asked about the BOJ's likely easing steps - and allowing for multiple answers in the survey - 17 economists said the BOJ would tweak its forward guidance wording, which says it will maintain its current extremely low level of interest rates "at least through around the spring of 2020."

Seven economists predicted the BOJ would increase buying exchange-traded funds, or ETFs, and Japan real estate investment trusts, or J-REITs, and a few said the bank would lower negative interest rates even further.

Currently, the BOJ allows its 10-year bond yield to fluctuate between plus 0.2% and minus 0.2%. That could widen to 0.4% above and below zero as early as September, said Izuru Kato, chief economist at Totan Research.

GROWTH RISKS

At its meeting this week, the BOJ is expected to maintain its stimulus programme and signal its readiness to boost monetary support if growing risks such as the escalating U.S.-China trade war threatens the economy's modest expansion.

The Fed, facing demands by President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged at its policy meeting this week and possibly lay the groundwork for a rate cut later this year.

Asked what dollar/yen rate would trigger further BOJ easing, 28 of 36 economists selected "beyond 100 yen," four chose "beyond 103 yen," three said "beyond 105 yen".

The dollar stood around 108.60 yen on Wednesday.

"If the yen strengthens to the psychologically important level of 100 (to the dollar), it could trigger the BOJ's additional easing," said Yusuke Kaniwa, an economist at Hamagin Research Institute.

Japan's economy as a whole will grow 0.6% in the current fiscal year to March 2020, although it is expected to shrink an annualised 1.9% in the fourth quarter due to a planned sales tax hike in October, the poll found.

Next fiscal year, the economy is forecast to expand 0.5%.

The nation's core consumer price index, which includes oil products but not fresh foods, will grow 0.7% this fiscal year and next, the poll predicted.

(Polling and reporting by Kaori Kaneko; Additional polling by Khushboo Mittal; Editing by Malcolm Foster & Shri Navaratnam)

By Kaori Kaneko


Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.11% 73.66 Delayed Quote.-2.32%
BRITISH POUND / JAPANESE YEN (GBP/JPY) -0.10% 135.348 Delayed Quote.-5.49%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) 0.32% 78.606 Delayed Quote.-5.28%
EURO / JAPANESE YEN (EUR/JPY) -0.30% 122.187 Delayed Quote.1.09%
EURO / US DOLLAR (EUR/USD) -0.60% 1.16766 Delayed Quote.4.77%
JAPAN REAL ESTATE INVESTMENT CORPORATION 0.39% 514000 End-of-day quote.-28.61%
JAPANESE YEN / SWISS FRANC (JPY/CHF) 0.24% 0.8738 Delayed Quote.-2.47%
LONDON BRENT OIL -3.61% 37.89 Delayed Quote.-38.33%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) 0.10% 69.41 Delayed Quote.-4.13%
SHIFT, INC. -3.56% 13260 End-of-day quote.66.17%
THE GLOBAL LTD. 9.48% 254 End-of-day quote.-46.07%
TOKAI CORP. -0.72% 2074 End-of-day quote.-26.48%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.31% 104.641 Delayed Quote.-3.82%
WTI -3.30% 36.385 Delayed Quote.-36.69%
share with twitter share with LinkedIn share with facebook
Latest news "Economy & Forex"
08:05pSTEEL & TUBE : A Successful Engagement between S&T and Manukau Jobs & Skills Hub
PU
08:05pTwitter beats revenue expectations but misses on user growth
RE
08:01pWall Street rebounds as market eyes tech results, strong U.S. data
RE
08:00pCorn, wheat futures hit two-week lows as coronavirus fears increase
RE
07:54pEconomy Surges but Hasn't Recouped All Pandemic Losses -- 4th Update
DJ
07:50pUNECA UNITED NATIONS ECONOMIC COMMISSION FOR AFR : The renewAfrica Initiative presented to EVP Timmermans
PU
07:44pG20 finance officials set November 13 meeting to finalize debt framework - sources
RE
07:44pCanadian dollar steadies as U.S. data helps calm investor nerves
RE
07:44pOil falls on lockdown angst, stocks rise to pare weekly loss
RE
07:43pU.S. agencies question FCC plan to shift auto spectrum to Wi-Fi
RE
Latest news "Economy & Forex"