October Most Likely Month for Extra BOJ Easing: Survey

Twenty-six percent of economists in a Bloomberg News survey forecast the Bank of Japan will expand monetary stimulus at the meeting on Oct. 31.

Thirty-two percent of economists forecast the Bank of Japan will expand monetary stimulus in 2014, down from 35 percent in a survey conducted before the August meeting.

Following are the results of the most recent survey, conducted August 25-29.

1) When do you next expect the BOJ to expand monetary stimulus? 
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Response Count:                                 31  100.0%
---------------------------------------------------------------------------
A. Sept.                                         0       -
B. Oct. 7                                        0       -
C. Oct. 31                                       8   25.8%
D. Nov.                                          1    3.2%
E. Dec.                                          1    3.2%
F. Jan. 2015                                     4   12.9%
G. Feb. 2015                                     1    3.2%
H. March 2015                                    1    3.2%
I. April 2015 or later                           7   22.6%
J. Don’t expect                                  8   25.8%

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2) How would the BOJ ease more next time? (Multiple answers possible.) =============================================================== A. Increase pace of monetary base expansion 14 B. Increase pace of JGB accumulation 16 C. Increase pace of ETF accumulation 17 D. Increase pace of J-REIT accumulation 13 E. Cut excess reserve rate 2 F. Others 3 =============================================================== 3) When will the BOJ start tapering? =============================================================== Response Count: 31 --------------------------------------------------------------------------- A. 2H 2014 0 - B. 1H 2015 0 - C. 2H 2015 0 - D. 1H 2016 1 3.2% E. 2H 2016 4 12.9% F. 1H 2017 2 6.5% G. 2H 2017 1 3.2% H. 2018 or later 5 16.1% I. Unforeseeable 18 58.1% =============================================================== 4) The Bank of Japan has said that Core CPI (inflation excluding fresh food, and also excluding the effects of the sales tax rises) is likely to reach around 2% y/y -- the price stability target -- the price stability target -- around the middle of the projection period through fiscal 2016. Do you think this forecast is achievable? --------------------------------------------------------------------------- Yes 4 No 26 --------------------------------------------------------------------------- Response total: 30

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5) Will the government raise the sales tax to 10% as planned? --------------------------------------------------------------------------- Yes 26 No 3 --------------------------------------------------------------------------- Response total: 29 =============================================================== 6) The Bank of Japan projects the monetary base will be 270 trillion yen at the end of 2014. Should the BOJ give a projection for the monetary base beyond the end of 2014? --------------------------------------------------------------------------- Yes 18 No 10 --------------------------------------------------------------------------- Response total: 28 =============================================================== 7) Does the lack of BOJ projections for the monetary base beyond 2014 reduce the effectiveness of QQE? --------------------------------------------------------------------------- Yes 14 No 16 --------------------------------------------------------------------------- Response total: 30 =============================================================== 8) Please specify your forecast for the benchmark 10-year JGB yield at the end of FY2014 should the government postpone the planned increase in the sales tax to 10%. --------------------------------------------------------------------------- Response total: 29 --------------------------------------------------------------------------- Lower than 0.5% 2 0.5% 2 0.6% 4 0.7% 8 0.8% 5 0.9% 1 1.0% 4 1.1% - 1.2% 1 1.3% 1 1.4% - 1.5% 1 1.6% - 1.7% - 1.8% - 1.9% - 2.0% - 2.1% - 2.2% - 2.3% - 2.4% - 2.5% - 2.6% - 2.7% - 2.8% - 2.9% - 3.0% - more than 3.0% -

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Individual responses for Q.1 - the timing of more easing. --------------------------------------------------------------------------- BofA Merrill Lynch: M. Kichikawa Oct. 31 Barclays Capital: K. Morita Don’t expect BNP Paribas: R. Kono Don’t expect Capital Economics: M. Thieliant April 2015 or later Citigroup: K. Murashima Oct. 31 Credit Suisse: H. Shirakawa Nov. Dai-ichi Life: H. Kumano Don’t expect Daiwa Research: M. Kumagai Jan. 2015 Daiwa Securities: M. Noguchi April 2015 or later HSBC Holdings: I. Devalier April 2015 or later Japan Macro Adv: T. Okubo April 2015 or later Japan Research: H. Yamada Don’t expect JPMorgan Chase: M. Kanno Don’t expect Meiji Yasuda: K. Shana April 2015 or later Mitsubishi UFJ Sec: N. Muguruma Oct. 31 Mitsubishi BCR: Y. Shimanaka Don’t expect MURC: S. Kobayashi Oct. 31 Mizuho Research: H. Takata Dec. Mizuho Securities: Y. Ueno Jan. 2015 NLI Research: Y. Yajima Jan. 2015 Nomura Sec: N. Matsuzawa Don’t expect Norinchukin Res: T. Minami Oct. 31 Okasan Securities: M. Suzuki Oct. 31 RBS Securities: J. Nishioka Don’t expect Shinshu Univ: A. Makabe Feb. 2015 SMBC Nikko: C. Morita March 2015 Societe Generale: T. Aida April 2015 or later Sumitomo Mitsui: H. Muto Jan. 2015 Tokai Tokyo Sec: K. Sano Oct. 31 Totan Research: I. Kato Oct. 31 UBS Securities: D. Aoki April 2015 or later ===============================================================
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