BoJ to announce further easing – RBC CM

Elsa Lignos, Senior Currency Strategist at RBC Capital Markets, suggests that the majority of analysts are looking for the BoJ to announce further easing with asset purchases and/or another rate cut.

Key Quotes

“The average expectation is a policy rate of -0.15% (current -0.10%) and an annual monetary base growth target of JPY85trn (current: JPY 80trn). There are not many options for easing policy that don’t flatten the yield curve or otherwise damage the banks, and we think the great risk is failure to reach a consensus on policy that meets expectations. We are tactically short USD/JPY in our trade of the week.”