A heads up for a packed monetary policy week ahead.
Yesterday we got the ECB to whet our appetite and next week brings another big three
- Federal Reserve on Wednesday September 18
- Bank of Japan on Thursday September 19
- Bank of England on Thursday September 19
There will be previews ahead, for now though some quick thoughts on the BOJ:
- ECB easing (not as much as was expected) will be eyed by the BOJ, they will not want to be left behind, especially with the Fed expected to ease also on Wednesday).
- The BOJ will also want to keep the yen from strengthening. Its had a bit of relief as optimism on trade talks increases but crunch time for trade talks is coming and if the past year is anything to go by pessimism is just around the corner, as are flows back into the haven yen.
- Also coming up is the sales tax hike in Japan, and again if the past is anything to go by this will not be a positive for the economy.
- Inflation … well, we all know this is nowhere near target.
The preconditions are there for further easing from the Bank of Japan.
Will they? Given the ECB move and the expected Fed move its hard to think they will not.
Will it do any good? I'll leave that to the economists.
