BOJ Extra Easing Most Likely in July to Sept.: Survey

Thirty-five percent of economists in a Bloomberg News survey forecast the Bank of Japan will expand monetary stimulus in the July-Sept. quarter. That compares with 28 percent in a survey conducted in January.

Following are the results of the most recent survey, conducted Feb. 6-12.

1) When do you next expect the BOJ to expand monetary stimulus? 
===============================================================
Response Count:                                 34  100%
---------------------------------------------------------------
A) Jan.-March 2014                               4   12%
B) April-June 2014                               9   26%
C) July-Sept. 2014                              12   35%
D) Oct-Dec 2014                                  5   15%
E) After 2014                                    2    6%
F) No further easing                             2    6%
===============================================================

2) How would the BOJ ease more next time?   
===============================================================
Response Count:                                 34  100%
---------------------------------------------------------------
a) Expanding monetary base                      23   68%
b) Purchasing more Japanese government bonds    25   74%
c) Buying more risk assets(ETFs, JREIT, etc)    23   68%
d) Cutting excessive reserve rates               2    6%
e) Others                                        6   18%
===============================================================

3) When will the BOJ start tapering?        
===============================================================
Response Count:                                 33   97%
---------------------------------------------------------------
A) 1H 2014                                       0    0%
B) 2H 2014                                       0    0%
C) 1H 2015                                       0    0%
D) 2H 2015                                       2    6%
E) 1H 2016                                       5   15%
F) 2H 2016                                       2    6%
===============================================================
Response Count:                                 33   97%
---------------------------------------------------------------
G) 1H 2017                                       2    6%
H) 2H 2017                                       1    3%
I) After 2018                                    7   21%
J) Unforeseeable                                14   41%
===============================================================

4) BOJ says that the year-on-year rate of change in the core CPI (excluding
the direct effects of the consumption tax hikes) is likely to reach around
2 percent toward the latter half of the projection period through fiscal 2015. 
Do you think the BOJ’s projection will be realized?  
5) If no, do you think that the BOJ will abandon its target of securing
2 percent inflation within two years?       
===============================================================
2% Inflation                                   Yes    No
---------------------------------------------------------------
Reach target                                     2    32
 If not, abandon target                         16    16
===============================================================
6) The BOJ maintained its price forecast for fiscal 2014 and 2015 
at the last meeting.  What’s your projection for consumer prices 
excluding fresh food and the impact of sales tax hike for the 
two years?                                  
===============================================================
Core CPI YoY% change                          FY14  FY15
---------------------------------------------------------------
Median                                        0.9%  1.0%
Average                                      0.96% 1.02%
High                                          1.8%  2.0%
Low                                           0.5%  0.0%
Mode (most frequent)                          1.0%  1.2%
-------------------------------------------------------
7) Do you think a further decline in the yen is necessary for the BOJ
to reach its 2 percent inflation target within its projection period?
===============================================================
Response Count:                                 34  100%
---------------------------------------------------------------
Yes                                             29   85%
No                                               5   15%

-------------Dollar/Yen exchange rate------------------
Median                                         120
Average                                        124
High                                           150
Low                                            110
Mode (most frequent)                           120
===============================================================

Individual Responses:                       
===============================================================================
                                               Q.1   Q.2      Q.3   Q.4   Q.7
Economist and Firm                          EasingEasing   Taper  Reach   Yen
                                            Timing  Type  Timing Target  Rate
-------------------------------------------------------------------------------
BofA Merrill Lynch: M. Kichikawa                 A    CE        *    No   110
Barclays Capital: K. Morita                      C  ABCE    2018~    No   140
BNP Paribas: R. Kono                             E    AB        *    No   120
Citigroup: K. Murashima                          C   ABC        *    No   145
Credit Agricole: K. Ogata                        B     B    2018~    No   130
Credit Suisse: H. Shirakawa                      C     E        *    No   150
Dai-ichi Life: H. Kumano                         F    AB        *    No   120
===============================================================================
                                               Q.1   Q.2      Q.3   Q.4   Q.7
Economist and Firm                          EasingEasing   Taper  Reach   Yen
                                            Timing  Type  Timing Target  Rate
-------------------------------------------------------------------------------
Daiwa Research: M. Kumagai                       B    BC        *    No   N/A
Daiwa Securities: M. Noguchi                     D     C        *    No   120
HSBC Holdings: I. Devalier                       C   ABC        *    No   120
Itochu Corp: Y. Maruyama                         C     C  2H 2016    No   120
Japan Macro Adv: T. Okubo                        B     E    2018~    No   130
Japan Research: H. Matsumura                     C     C  1H 2016    No   N/A
JPMorgan Chase: M. Kanno                         B   ABC    2018~    No   120
Meiji Yasuda: Y. Kodama                          A   ABC  1H 2016    No   125
Mitsubishi UFJ Sec: N. Muguruma                  D   ABC        *    No   N/A
Mitsubishi BCR: Y. Shimanaka                     F     E  2H 2015   Yes   110
MURC: S. Kobayashi                               B    AB        *    No   120
Mizuho Research: H. Takata                       A   ABC    2018~    No   120
Mizuho Securities: Y. Ueno                       C   ABC        *    No   135
Monex Inc.: N. Murakami                          E   ABE  1H 2016   Yes   110
Morgan Stanley: T. Yamaguchi                     C   ABC             No   N/A
NLI Research: Y. Yajima                          B   ABD    2018~    No   120
===============================================================================
                                               Q.1   Q.2      Q.3   Q.4   Q.7
Economist and Firm                          EasingEasing   Taper  Reach   Yen
                                            Timing  Type  Timing Target  Rate
-------------------------------------------------------------------------------
Nomura Sec: N. Matsuzawa                         D   ABC  1H 2016    No   125
Norinchukin Res: T. Minami                       C  ABCD 1H 2017     No   130
Okasan Securities: M. Suzuki                     C   ABC  2H 2016    No   120
RBS Securities: J. Nishioka                      B     C  2H 2015    No   125
Shinshu Univ: A. Makabe                          A  ABDE  1H 2016    No   N/A
SMBC Friend: M. Iwashita                         D     E        *    No   N/A
SMBC Nikko: C. Morita                            B   ABC  2H 2017    No   125
Societe Generale: T. Aida                        B   ABC 1H 2017     No   115
Sumitomo Mitsui: H. Muto                         C  ABCE    2018~    No   130
Tokai Tokyo Sec: K. Sano                         D   ABC        *    No   120
Totan Research: I. Kato                          C   ABC        *    No   115
===============================================================================

NOTE1: "*" = Unforeseeable NOTE2: For the individual responses, the number at the head of each column denotes the corresponding question.

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