A majority of the economists polled by Reuters opine that the Bank of Japan’s (BOJ) next move would be to expand stimulus, up from about half last month and 38% just two months ago.
This comes as the US Federal Reserve (Fed) is set to cut rates later this month.
Key Findings:
“Almost two-thirds of those who predicted easing expect it within the year and some as early as this month.
Thirty of 40 economists predicted the BOJ’s next move would be to loosen policy further, while 10 said the bank would tighten, the July 3-16 poll found.
Seven of the economists who forecast more easing said the central bank would ease this month, six predicted September, five selected October and two said December.
25 economists expected the BOJ to tweak its forward guidance. The BOJ pledges to keep very low-interest rates “at least through around the spring of 2020” and economists predicted the central bank would extend this period.
Eight economists said the BOJ would increase its buying of exchange-traded funds (ETFs) and Japanese real estate investment trusts (J-REITs).
Three predicted the bank would deepen its negative interest rates only, while two forecasts that it could cut both its negative interest rates and the 10-year bond yield target.
The poll also found Japan’s economy would expand 0.5% in the fiscal year to March 2020
The nation’s core consumer price index, which includes oil products but not fresh foods, will rise 0.7% this fiscal year and 0.6% the following year.”
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