BOJ Seen Easing by Only Analyst to Predict Previous Stimulus
The Bank of Japan (8301) will expand monetary stimulus at next week’s policy meeting to show a commitment to ending deflation, according to the only analyst in a Bloomberg News survey who predicted last month’s easing.
“There will be a big disappointment if they don’t do anything this time,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo and a former BOJ official, said in a phone interview yesterday. “The BOJ knows the market is gauging its seriousness at the next meeting and it wants to show it is really stepping up to end deflation.”
Shirakawa was the only one of 13 economists surveyed to forecast the BOJ’s easing last month aimed at weakening the yen and countering price declines as the nation struggles to recover from last year’s earthquake. The currency’s rise to a post-World War II record against the dollar in October contributed to the economy contracting for a third year in four.
The yen weakened 0.3 percent to 81.83 per dollar as of 12:33 p.m. in Tokyo today as Greece moved closer to securing a rescue package, diminishing the Japanese currency’s appeal as a haven. The Nikkei 225 Stock Average rose 1.8 percent, heading for its highest close since August.
The economist’s view contrasts with forecasts from BNP Paribas SA, Citigroup Inc. and Nomura Securities Co. that the BOJ will leave policy unchanged next week.
On Feb. 14, the central bank expanded its asset purchase program by 10 trillion yen ($123 billion) and set an inflation goal of 1 percent. The next policy decision is due March 13. Shirakawa didn’t specify what extra step is likely.
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