Analysts at Nordea Markets suggest that while headline inflation looks poised for a strong summer across the geographical board (potentially giving the ECB a tough summer), as energy prices will provide a solid boost (with a peak in July), the case is though different in Japan.
Key Quotes
“The peak is likely already in on Japanese inflationary pressures, as the benign effects from past JPY weakness have now started to fade. It thus looks more and more likely that the next BoJ move will be one towards further easing, rather than the in opposite direction.”
“The big question-mark for the BoJ dovish view is whether the summer of 2018 will turn into a troublesome one for Shinzo Abe, as the Liberal Democratic Party must hold a leadership election in or before September. The current stance of BoJ to a certain extent hinges on Abe staying in power.”
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