Comments from Robert Feldman, chief economist in Tokyo for Morgan Stanley MUFG Securities Co
and ex of the International Monetary Fund and the Federal Reserve Bank of New York
The Bank of Japan will be forced to change its stimulus strategy as soon as next autumn
- As it runs out of government debt to buy from the market
- BOJ shift to a cap on yields, using bond purchases as needed, rather than buying notes and other assets to hit a monetary base level
"If there's an issue, it's what do they do when they don't have enough bonds left to buy"
"Some sort of regime change will probably be necessary."
Expects the BOJ to reach 2% inflation around the end of 2016
- Doesn't see the need for accelerated easing ... "Unless something really bad happens, there's no reason to use more monetary stimulus"
- "Underlying prices really are improving."
Remains optimistic that wages in Japan will climb, adding to inflationary pressures
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