Bloomberg
Published Mar 15, 2019 02:01
Updated Mar 15, 2019 16:04
BOJ to Join Chorus on Global Growth Concerns: Decision-Day Guide
(Bloomberg) -- The Bank of Japan is likely to underscore the cautious tilt of global central banks by downgrading some of its economic assessments Friday. The focus is whether the gloomier international outlook prompts any hints of further monetary easing.
The BOJ will keep its yield-curve control program and asset purchases unchanged at the end of a two-day meeting, according to all 46 economists surveyed by Bloomberg. With signs of a weakening economy, the bank is likely to discuss lowering its assessment of exports, production and overseas economies, according to people familiar with the matter.
Even if the BOJ changes some economic assessments, it is unlikely to change its overall view that the economy is expanding moderately, the people said.
While increasing gloom has prompted the Federal Reserve to pause on interest-rate hikes and the European Central Bank has added to its monetary easing, Governor Haruhiko Kuroda is expected to avoiding signaling any change in policy could come soon, which would roil trading in the yen, bonds and stocks.
Most surveyed economists still see the BOJ sticking with its current policy before reining in its stimulus at some point in the future. But a growing minority of them are forecasting additional easing as the next policy step rather than tightening.
They cite growing concerns that Japan’s economy is weakening and the likelihood that inflation will head toward zero -- or even below -- later in the year, while a tax increase is set to further complicate matters.
The BOJ typically releases its policy statement around lunchtime, followed by a press briefing by Kuroda at 3:30 p.m. in Tokyo.
What to look for
“I expect the BOJ to hold off any additional easing until the probability of a recession gets high because they want to save their scarce policy resources,” said Hiroshi Ugai, chief Japan economist at JPMorgan Chase & Co (NYSE:JPM). and a former BOJ official.
What Bloomberg’s Economists Say
The signs of a weakening economy have appeared in recent data. “But at this point, it’s not bad enough to prompt much alarm, in our view. We think the BOJ is ready to ride out any mild turbulence within its current framework -- keeping its policy settings unchanged.”
--Yuki Masujima, Japan economistClick here to view the piece
Policy Recap
Written By: Bloomberg
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