BOJ meeting: key points
- As expected, the Bank of Japan left monetary policy unchanged, leaving the annual QE target 60-70 trillion yen
- The BOJ Governor Kuroda explained on a press-conference, that an aggressive easing was maintained to compensate the impact of the April sales tax hike. Easing has an intended effect
- Dovish point is that BOJ acknowledged housing investment slump post the sales hike
- However, the major risk seen for the economy is external, not the effect of the tax hike
- Despite the recent negative data, the BOJ believes the economy “is recovering as a trend”, private consumption is resilient
- Inflation: CPI ex. Food prices and sales tax hike effect will stay unchanged at 1.25% in the short term. Inflation target of 2% will be reached in Oct 2015 – March 2016.
BOJ acknowledged there is some downbeat effect from the tax hike, but did’t disclose any additional easing intentions