Bank of Japan Preview

November 18, 2012

The BOJ Board meets on Monday and Tuesday.  A policy change isn’t likely because the Board eased significantly after its last meeting on October 30 and insofar as the country is in a campaign season for a parliamentary election on December 16.  The DPJ will probably cede power back to the LDP.

The Board on October 30 increased its asset purchase plan from a ceiling of 80 trillion yen to one of 91 trillion yen, which is to be fully used by end-2013.  This enhancement is explained in a an extra memo that accompanied the post-meeting statement.  The uncollateralized target call money rate was unanimously left at zero to 0.1%, a range used since October 2010. 

At the late-October Board meeting, new forecasts for growth and inflation were unveiled in the semi-annual Outlook for Economic Activity and Prices. 

Governor Shirakawa’s 5-year term expires next March 19th.  A more accommodative policy, intended partly to promote a weaker yen, is expected to be pursued by his successor.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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