Japan Seen Anteing Up on Stimulus as Yen Impact Fades: Economy

Japan Seen Anteing Up on Stimulus as Yen Impact Fades: Economy
25 April 2012, by Toru Fujioka and Masahiro Hidaka (Bloomberg)
http://www.bloomberg.com/news/2012-04-24/bank-of-japan-seen-anteing-up-on-stimulus-as-yen-impact-fades.html

Excerpt:

Japan’s central bank is set to ante up on stimulus measures as a rebound in the yen shows that the impact of a 10 trillion yen ($123 billion) expansion in asset purchases in February is fading.

All 14 economists in a Bloomberg News survey predict additional easing when the Bank of Japan releases new inflation forecasts on April 27. Most expect an increase ranging from 5 trillion yen to 10 trillion yen.

One dynamic that may undermine stimulus efforts is Governor Masaaki Shirakawa’s own comments, repeated in the U.S. last week, that monetary policy has only a limited role in ending deflation and supporting growth.

Former Bank of Japan board member Atsushi Mizuno says investors are confused on where the central bank stands, while JPMorgan Chase & Co. says failing to ease could see the yen strengthen further.

“The BOJ will have to clearly show powerful easing amid high market expecations and elevated political pressure,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former official at the central bank.

“Otherwise, investors will be more confused and the view will become more widespread that there is no change in the BOJ’s passive stance.”