BOJ Decision Seen as Almost a Coin Flip in Economist Survey

  • Sixteen of 36 analysts expect BOJ to add stimulus this Friday
  • Federal Reserve to decide on rates a day before BOJ meeting

Economists remain split on whether the Bank of Japan will boost its already record stimulus at a meeting on Oct. 30.

While 16 of 36 analysts surveyed by Bloomberg said they expect Governor Haruhiko Kuroda and his board to bolster monetary policy, eight forecast further easing at a later date and 12 see no prospect of any change in the foreseeable future.

The BOJ’s meeting Friday will cap a crucial week for central banks, with monetary authorities from Sweden, New Zealand and the U.S. determining benchmark interest rates. Kuroda and the eight other members of his board also will provide an updated outlook for the Japanese economy and inflation.

Some economists predict the BOJ will adjust its inflation outlook amid lower oil prices and a weak economy. Consumer prices excluding fresh food fell 0.1 percent in August, below zero for the first time since April 2013.

“The need of further easing is rising higher as the BOJ delays the timing of reaching the 2 percent price target,” Mitsubishi UFJ Morgan Stanley Securities Co. wrote in a report Monday, saying that inflation and growth are weaker than expected by the BOJ.

The central bank’s projections for inflation may be lowered from 0.7 percent this fiscal year and 1.9 percent for the following 12 months, which could lead it to revise the timetable for reaching the 2 percent inflation target, according to people familiar with the BOJ’s discussions.

Still, it’s possible the bank will keep policy unchanged, according to Takuji Okubo, an economist with Japan Macro Advisors.

He said the BOJ is “likely to tolerate a delay in its target period,” which is now around the six months through September next year. Kuroda had originally hoped to reach his goal about two years after launching his program in April 2013.

Forecasts for Policy at this meeting

Economist and FirmMonetary Base JGBs
Interest rate on
excess reserves
Current Target80 tln yen80 tln yen3 tln yen90 bln yen0.1%
BofA Merrill Lynch: M. Kichikawa80803900.1%
Barclays Capital: K. Morita100-1101006900.1%
BNP Paribas: R. Kono80803900.1%
Capital Economics: M.<br>Thieliant90858900.1%
Citigroup: K. MurashimaRaise985900.1%
Credit Agricole: K. Ogata85-90803900.1%
Credit Suisse: H. Shirakawa80803900.1%
Dai-ichi Life: H. Kumano100100RaiseRaise0.1%
Daiwa Securities: M. Noguchi80803900.1%
Goldman Sachs: N. Baba90905900.1%
HSBC Holdings: I. Devalier80803900.1%
Itochu Eco. Research Inst., A. Takeda85854900.1%
Japan Macro Adv: T. Okubo80803900.1%
Japan Research: H. Yamada80803900.1%
JPMorgan Chase: M. Kanno10010062000.1%
Meiji Yasuda: Y. Kodama80803900.1%
Mitsubishi UFJ Sec: N. Muguruma80805900.05%
Mitsubishi BCR: Y. Shimanaka90824.51500.1%
MUFJ Research & Consulting:
S. Kobayashi
Mizuho Bank; D. Karakama80803900.1%
Mizuho Research: H. Takata909051500.05%
Mizuho Securities: Y. Ueno90905900.1%
NLI Research: Y. Yajima80803900.1%
Nomura Sec: N. Matsuzawa80803900.1%
Norinchukin Res: T. Minami80803900.1%
Okasan Securities: M. Suzuki80803900.1%
Shinshu Univ: A. Makabe80803900.1%
SMBC Bank, J. Nishioka80803900.1%
SMBC Friend: M. Iwashita80803900.1%
SMBC Nikko: C. Morita80803900.1%
Societe Generale: T. Aida85803900.1%
Standard Chartered; B Wang90RaiseRaiseRaise-
Tokai Tokyo Research: H.<br>Muto80803900.1%
Tokai Tokyo Sec: K. Sano80803900.1%
Totan Research: I. Kato80803900.1%
UBS Securities: D. Aoki90803900.1%

Individual responses to question on timing of any more easing

Economist and FirmLast surveyThis Survey
BofA Merrill Lynch: M. Kichikawa-No further easing 
Barclays Capital: K. MoritaOct. 30Oct. 30
BNP Paribas: R. KonoNo further easing No further easing 
Capital Economics: M.
Oct. 30Oct. 30
Citigroup: K. MurashimaOct. 30Oct. 30
Credit Agricole: K. OgataOct. 30Oct. 30
Credit Suisse: H. ShirakawaOct. 30April 2016
Dai-ichi Life: H. KumanoOct. 30Oct. 30
Daiwa Securities: M. NoguchiNo further easing No further easing 
Goldman Sachs: N. BabaOct. 30Oct. 30
HSBC Holdings: I. DevalierNo further easing No further easing 
Itochu Eco. Research Inst.,
Takeda, A
Oct. 30Oct. 30
Japan Macro Adv: T. OkuboNo further easing No further easing 
Japan Research: H. YamadaNo further easing No further easing 
JPMorgan Chase: M. KannoOct. 30Oct. 30
Meiji Yasuda: Y. KodamaJan. 2016Jan. 2016
Mitsubishi UFJ Sec: N.
Oct. 30Oct. 30
Mitsubishi BCR: Y. ShimanakaOct. 7Oct. 30
MUFJ Research and
Consulting; S. Kobayashi
Oct. 30Oct. 30
Mizuho Bank; D. KarakamaNo further easing No further easing 
Mizuho Research: H. TakataOct. 7Oct. 30
Mizuho Securities: Y. UenoOct. 30Oct. 30
NLI Research: Y. YajimaJan. 2016Jan. 2016
Nomura Sec: N. MatsuzawaNo further easing No further easing 
Norinchukin Res: T. MinamiNo further easing No further easing 
Okasan Securities: M. SuzukiNo further easing Dec.
Shinshu Univ: A. MakabeApril 2016April 2016
SMBC Bank, J. NishiokaJan. 2016Jan. 2016
SMBC Friend: M. IwashitaNo further easing No further easing 
SMBC Nikko: C. MoritaMarch 2016March 2016
Societe Generale: T. AidaOct. 30Oct. 30
Standard Chartered; B WangOct. 30Oct. 30
Tokai Tokyo Research: H.
No further easing No further easing 
Tokai Tokyo Sec: K. SanoNo further easing No further easing 
Totan Research: I. KatoNo further easing April 2016
UBS Securities: D. AokiOct. 30Oct. 30

Question on BOJ achieving inflation target

Will the BOJ reach the 2 percent target around the first half of fiscal 2016, as it says?

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