• The Bank of Japan (BoJ) will release Q1 Tankan survey results on 1 April. Standard Chartered Research (SC) expects “the large manufacturers Diffusion Index to have improved to 14 (from 12 in Q4-2014) and the outlook to have risen to 13 (from 9).:
  • Japanese yen (JPY) weakness likely boosted sentiment among large manufacturers, particularly exporters. However, SC adds that it “expect[s] small businesses to have remained uncertain as rising operating costs and subdued domestic demand weighed on their operations. We await USD-JPY forecasts for FY15 (year starting April 2015). USD-JPY forecasts for FY14 were raised four times to 103.36 in last year’s survey.”
  • SC forecasts “inflation expectations to have slid against the backdrop of declining oil prices. Although many BoJ members believe medium- to long-term inflation expectations will improve, core inflation (i.e., inflation excluding fresh food) excluding the sales-tax effect was 0% in February. This was the same as in May 2013, one month after the BoJ started its large asset purchases.”c

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