Majority of analysts see BOJ easing in September, changing price goal wording

Thu Aug 25, 2016 6:55am EDT
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By Kaori Kaneko and Sumanta Dey

TOKYO/BENGALURU (Reuters) - A majority of economists expects the Bank of Japan will ease policy further next month, a Reuters poll found, while many respondents suspect a change in its inflation target terminology is likely.

But about 40 percent of analysts surveyed said they expected the central bank to keep monetary policy unchanged, showing analysts' expectations are close to evenly divided.

Faced with stubbornly low inflation and new fiscal spending by Prime Minister Shinzo Abe, the BOJ increased its purchases of exchange-traded funds (ETF) in July and said it would review its policies in September, steps that fell short of expectations.

BOJ Governor Haruhiko Kuroda was quoted on Saturday saying that negative interest rate policy had not reached its limits and the central bank would consider whether to make any changes to its 80 trillion yen ($798 billion) per year asset-purchase plan next month.

Asked how the September review might influence BOJ policy decisions, 14 of 24 economists said it would lead to further easing, nine saw no change, and one expected a tapering of the BOJ's stimulus drive, the poll taken Aug 16-24 found.

Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said the BOJ was likely to slightly tweak its current quantitative easing programme and negative rate policy.

"It could include a change of its monetary base target to make a range and increase corporate bond purchases," he said.

"The central bank is likely to freeze its minus 0.1 percent negative rate."   Continued...

A businessman walks past the Bank of Japan (BOJ) building in Tokyo, Japan, March 23, 2016.   REUTERS/Toru Hanai/File Photo