We love the BoJ’s no-nonsense approach to amendments. If you’re doing something wrong, or not doing enough, just cross it out and change it:
So what’s behind the largely expected decision to boost asset purchases to 40 trillion yen from 30 trillion yen?
Just Japan’s endless battle with deflation. Inflation data on Friday showed prices rose just 0.2 per cent (mainly due to increased fuel costs), while unemployment remained static and household spending rose less than expected.
Here’s some commentary from Societe Generale’s Lauren Rosborough:
The BOJ has increased its asset-purchase scheme by Y 10trn (though the net increase in QE will be Y5trn as another programme was cut back) and extended the maturity of purchases to 3 years. Y50trn, and 30 years would have been more impressive. The BOJ has a long track record of being insufficiently bold.
Today’s move was very much in line with what had been leaked early so the initial reaction will be muted, ahead of Golden Week. USDD/JPY remains in a tight 80-82 range, with a risk now that we re-test the lower end of that range. We remain long CAD/JPY but are not going to get much joy from that today, I fear.
All this perpetual easing is really starting to remind us of a broken record.
Repeat. Repeat. Repeat. Pause…. And repeat. Repeat. Repeat.
RoRo and the BoJ – FT Alphaville