A steady as she goes announcement with nothing new of significance

  • Monetary policy unchanged
  • Still pledging to increase the monetary base at annual pace of 60 to 70 Tr yen
  • Upgrade of economic assessment
  • Made no reference to jump in recent JGB yields
  • Capex has stopped weakening on the whole
  • Exports have stopped decreasing
  • Private consumption has seen increased resilience
  • Improved consumer sentiment
  • Industrial output stopped declining, signs of pick up becoming more evident
  • Some indicators suggest a rsie in inflation expectations
  • Housing investment generally picking up
  • BOJ continuing to buy JGBs (at annual pace of aboutY50Tr & average maturity to reach 7 years), ETFs (at annual pace of about Y1Tr), J-REITS (at annual pace of aboutY30B)
  • CPI likely to fall slightly for time being, but likely to turn gradually positive thereafter
  • Financial conditions remain accommodative
  • high degree of uncertainty over Japan’s economy remains, including Europe debt problem, growth momentum in USA, emerging market economies