A Reuters poll shows 28 out of 36 economists share the view
A recurring cry, which should only get louder as 2018 progresses and which we have already been discussing here the past few months. Thus far, the BOJ’s officials rhetoric has only evolved very slightly, admitting there will be a time when they need to
adapt the ultra lose policies. Here’s the Reuters article
The Japanese government in the meantime has maintained their assumed govt borrowing rate at 1.1% for the fiscal 2018/19 budget draft, banking on continued support from BOJ, a cheap rate for their extra stimulus package, low cost for for their huge debt funding.
BOJ will probably not change anything to the actual policy next week but every wording change will be dissected by the markets for hints next year. We may have to wait for the Spring wage talks to be over before a real policy shift but Kuroda has surprised the markets in the past. A change in the JGB buying amounts and a gentle tweak of the YCC would be enough to get the JPY going.
Better get ready early,I’ve sold some risk pairs GBPJPY and EURJPY the morning, leaving the USD out of the equation ahead of CPI and FOMC.
The democrats victory in Alabama, the difficult, especially uncertain and pantomime like Brexit handling should keep a lid on risk rallies for now .