FXStreet (Guatemala) – Analysts at Bank of America Merrill Lynch offered an assessment of overseas economies is key the BOJ will hold a Monetary Policy Board meeting on 14-15 July.
Key Quotes:
“We expect it to adhere to its current monetary policy framework, including the amounts and residual maturities of its bond purchases. The BOJ will issue an interim assessment of its Outlook for Economic Activity and Prices at this meeting, and based on the last three months of data, we believe it is unlikely to significantly change the optimistic economic and inflation forecasts in the Outlook report released in April.”
“One of the focal points of debate at the upcoming policy meeting will be the risk assessment and the degree to which rising uncertainties in overseas economies and financial conditions, including in Greece and China, have a negative impact on Japan’s economy and inflation via trade, exchange rates, and commodity prices.”
“What is important for the BOJ when evaluating policy, however, is the size and sustainability of those impacts, and those will change depending on the policy response in the EU and China. At this point, the BOJ’s likely stance will be to monitor the policy response from each government (EU and China) and its effect.”
(Market News Provided by FXstreet)