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6 Aug 2013
Flash: Kuroda's support to tax hike limits USD/JPY downside - Nomura
FXstreet.com (Barcelona) - The BOJ is expected to leave policy unchanged on August 8, with expectations for policy change fairly muted, in view of Nomura Strategist Yujiro Goto, thus volatility on the Japanese Yen should be limited.
Key Quotes
"While the BOJ expected to be make little or no change to monetary policy in the near future, the consumption tax hike
discussion becomes more important Japanese macroeconomic policy debate (see Political events this year and JPY, 31
July 2013). Dow Jones has reported that Governor Kuroda is likely to mention his positive view on the scheduled consumption tax
hike again at the press conference after the meeting."
"Governor Kuroda’s clear stance in support of a consumption tax hike implies that the Bank is willing to
ease again if such a tax hike next year slows the economy significantly, limiting downside risk of USDJPY in the medium
term. On the other hand, if the government postpones the tax hike, the Bank may become more reluctant to accelerate JGB
purchases in case the downside risk to the economy grows or materializes."
Key Quotes
"While the BOJ expected to be make little or no change to monetary policy in the near future, the consumption tax hike
discussion becomes more important Japanese macroeconomic policy debate (see Political events this year and JPY, 31
July 2013). Dow Jones has reported that Governor Kuroda is likely to mention his positive view on the scheduled consumption tax
hike again at the press conference after the meeting."
"Governor Kuroda’s clear stance in support of a consumption tax hike implies that the Bank is willing to
ease again if such a tax hike next year slows the economy significantly, limiting downside risk of USDJPY in the medium
term. On the other hand, if the government postpones the tax hike, the Bank may become more reluctant to accelerate JGB
purchases in case the downside risk to the economy grows or materializes."