Quotes from Standard Chartered:
-Bank of Japan (BoJ) policy makers will meet on 19 September. We
expect them to keep the overnight rate unchanged at 0.10% and the
Asset Purchase Program target at JPY 70trn. Nonetheless, there is
increasing debate over whether the BoJ is doing enough to support
growth, as well as its commitment to achieve its 1% inflation target
by 2014.
-Some domestic politicians have recommended that the BoJ consider
purchasing foreign bonds to curb yen strength. Recent data shows
growth momentum slowing rapidly as demand stemming from earthquake
reconstruction spending starts to wane; we see this adding to the
pressure on the BoJ to act and consider boosting its monetary arsenal
as early as Q4-2012.
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