FXStreet (Delhi) – Naohiko Baba, Research Analyst at Goldman Sachs, suggests that the research house maintains the base case of the BOJ’s additional easing on October 30, although they do not fully rule out the possibility of an earlier move next week.
Key Quotes
“We think Japan’s economy can narrowly escape a technical recession, but the current state of the economy is far below the BOJ’s outlook.”
“Expected inflation rates, on which the BOJ place large importance as a QQE transmission channel, have been on a downtrend almost across the board with the corporate outlook in the Tankan Survey providing the latest clear evidence, which run counter to Governor Kuroda’s assertions.”
“Without additional easing at all in October, we believe Mr. Kuroda’s commitment would be seen as wavering considerably, and this could prompt the market to drive a change.”
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