- could take ” quite extraordinary” steps when it acts
- if BOJ were to ease more it’s most likely to boost JGB buying or clarify how long it will keep current QE in place
- it’s hard for BOJ to boost risk asset purchases by large amounts
- Europe should not fret too much about risk of Japan-style deflation, doing so would hurt market sentiment
- doubts that the BOJ will meet its price target. says its unclear how its huge asset purchases would lead to higher inflation expectations
The BOJ will probably maintain its bullish price forecast for as long as possible and keep policy unchanged until it becomes absolutely impossible to continue arguing that its price target can be met.
But once Governor Kuroda feels something must be done I think he will do something extraordinary because small steps won’t work.
Ex BOJ board member and policy maker Miyako Suda served for 10 years until 2011. Now special adviser at a private think-tank.
