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Shirai (Ex-BOJ) sees no easing from BOJ

BOJ should refrain from expanding monetary stimulus as borrowing costs are already very low, Reuters says citing interview with former BOJ board member Sayuri Shirai. Here are the most important headlines from the interview:

  • Economy is in fairly good shape
  • BOJ should next taper its asset-buying program, along with further lowering of negative interest rates
  • Recent appreciation of yen may hurt corporate profits temporarily, but still within 100-110 yen zone deemedcomfortable for many companies
  •  If the yen appreciates sharply further, that could be problematic. But that’s not something that can be addressed with monetary policy

The interview is quite interesting, but the markets shows no reaction to ex-BOJ member views. However, it’s possible that the Bank of Japan will refrain from further easing in the near-term and will asses an impact of Brexit on financial markets. The market is quite convinced that further easing is necessary, but we doubt if it’s a done deal.

 

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