“The Bank of Japan may expand stimulus this month after lawmakers escalated pressure for extra action by blocking a candidate for the bank’s board and renewing calls for a more “proactive” monetary policy.
Morgan Stanley MUFG Securities Co., Mizuho Securities Co. and SMBC Nikko Securities Inc. predict that the BOJ will expand asset purchases at a meeting on April 27.
Parliament’s upper house yesterday rejected BNP Paribas SA economist Ryutaro Kono, described by Goldman Sachs Group Inc. (GS) as holding similar views to Governor Masaaki Shirakawa, who says that monetary policy alone cannot solve deflation. The central bank may stand pat at a two-day meeting ending April 10, preserving ammunition for later in the month, when price projections will show a goal of 1 percent inflation is not in sight, according to Morgan Stanley.
“The BOJ must be struggling to balance between responding to political requests and operating effective monetary policies,” said Akio Makabe, an economics professor at Shinshu University in central Japan.
Japanese stocks pared losses on the decision by the upper house, with the Nikkei 225 Stock Average still closing down 0.5 percent yesterday after falling demand for Spanish bonds refocused attention on Europe’s debt crisis. Japan’s currency traded at 82.27 per dollar as of 12:10 p.m. in Tokyo today and the Nikkei fell 0.7 percent, heading for its biggest weekly loss since August….”
If you enjoy the content at iBankCoin, please follow us on Twitter
