Back
19 May 2015
BoJ likely to remain on hold in its May policy meeting – BAML
FXStreet (Barcelona) - The Team at BofA-Merrill Lynch, previews the BoJ monetary policy meeting on 21-22 May, and expect the central bank to maintain its policy and QE purchases unchanged.
Key Quotes
“The Bank of Japan (BoJ) will hold a Monetary Policy Board meeting on 21-22 May. We expect it to adhere to its current monetary policy framework, including the amounts and residual maturities of its bond purchases. This is because we do not at this stage expect any significant change in the growth and inflation outlooks that it included in its Outlook report on 30 April.”
“Of the data announced since the last policy meeting, the April Economy Watchers Survey showed improvement in both the current and outlook diffusion indexes. Although the rate of improvement in labor conditions slowed, labor market supply-demand is still tight.”
“On the inflation side, core consumer prices (excluding consumption tax impacts) rose 0.2% YoY in March, a slight recovery from 0.0% in February, but the central Tokyo CPI for April suggests inflation is likely to narrow again without following an established trend.”
“At any rate, the change in energy prices is having a major impact. Without any significant changes in the data on the economy and the output gap, we think the BoJ is unlikely to modify its assessment of the underlying inflation trend.”
Key Quotes
“The Bank of Japan (BoJ) will hold a Monetary Policy Board meeting on 21-22 May. We expect it to adhere to its current monetary policy framework, including the amounts and residual maturities of its bond purchases. This is because we do not at this stage expect any significant change in the growth and inflation outlooks that it included in its Outlook report on 30 April.”
“Of the data announced since the last policy meeting, the April Economy Watchers Survey showed improvement in both the current and outlook diffusion indexes. Although the rate of improvement in labor conditions slowed, labor market supply-demand is still tight.”
“On the inflation side, core consumer prices (excluding consumption tax impacts) rose 0.2% YoY in March, a slight recovery from 0.0% in February, but the central Tokyo CPI for April suggests inflation is likely to narrow again without following an established trend.”
“At any rate, the change in energy prices is having a major impact. Without any significant changes in the data on the economy and the output gap, we think the BoJ is unlikely to modify its assessment of the underlying inflation trend.”