BoJ: Little impetus to alter current course of monetary policy - TDS

Analysts at TDS see little impetus for the BoJ to alter its current course of monetary policy and expect no changes to yield curve control next year as the BoJ likely prefers to be the laggard of the G3 central banks.

Key Quotes

“We think that the BoJ will wait until the ECB is near the end of its taper program before signaling a change. Thus, the earliest we see a potential shift in the BoJ stance (as it relates to its balance sheet — most likely its ETF program) is H2 2018. With the BoJ already buying fewer JGBs and Abe receiving a supermajority in government, Kuroda should be reappointed as Governor once his term ends in April.”

“We believe monetary policy is widely viewed as the most successful “arrow” of Abenomics, with the economy nearing full employment despite lackluster wage growth and inflation.”