The Bank of Japan monetary policy announcement is due tomorrow
By now you'll know there is no scheduled time fr their announcement after the meeting
It happens when it happens
Usually in the 0230 to 0330 GMT time window
I'll have more tomorrow, but here are some thoughts from BoA Merrill Lynch (ps. this was posted at the Livesquawk members website ... you can get a free trial subscription here. Tell 'em Eamonn sent you, but don't tell 'em I nicked this, K?).
- After a promising start, Abenomics has clearly lost momentum. How does it get it back? For the BoJ, the next step is critical.
- The January experience suggests a small move in an adverse market is a mistake. As with the first two big announcements, it needs to try to build on market momentum and take a decisive step. If it is going to move interest rates deeper into negative territory it should be paired with an aggressive expansion of QQE. Specifically, we expect the BoJ to expand its QQE policy at the April or June meeting with the former slightly more likely.
- In our base case, the main stimulus is a doubling of annual ETF purchases from ¥3tn to ¥6tn. Other moves are possible including a small further move into negative rates, but we think that should not be the main policy change given the risk of another adverse market response.
- We also see a significant chance that the BoJ waits until June for its next move, but June seems like a bit too long to wait and in April they need to announce new forecasts that could complement the policy change.
- The demographic and debt clocks are ticking. A return to a more decisive BoJ is only a small part of what is needed. Easy monetary policy can jump start growth and inflation, but the rest of Abenomics must do the heavy lifting thereafter. First and foremost, they need to get moving on raising potential GDP growth through structural reform.
