JPY: Expect BOJ Easing this Week – Goldman Sachs
Research Team at Goldman Sachs, notes that the BOJ is due to hold its
next policy meeting on April 27-28 and they think the BOJ is likely to
decide on further easing action this week, centered on additional ETF
purchases.
Key Quotes
“Given the rising
risk that business confidence has been dented by recent financial market
instability and the Kumamoto earthquakes, and in view of BOJ governor
Haruhiko Kuroda’s recent proactive statements on possible additional
easing in response to the sharp deceleration in inflation in April. We
also see a possibility of a cut in the loan rate in its loan support
program.
We expect March national core CPI to fall to -0.2% yoy,
due to lower electricity charges and gasoline prices. For March national
core-core CPI we forecast a flat print at +0.8% in the absence of large
price movements other than energy prices. We forecast April Tokyo core
CPI will come in at -0.4% yoy (March -0.3%).
We expect March
production to rise +2.5% mom, showing a partial recovery from the large
-5.2% decline in February that was impacted by special factors including
temporary closure of a major auto plant.”