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Bloomberg
Some analysts expect the Bank of Japan to fire another blast of monetary stimulus at the end of its two-day policy meeting on September 21. Others see a central bank with little if any ammunition left — or one turned gun-shy. For some economists, the BOJ’s decision to undertake a comprehensive review of its easing program to be concluded at the meeting underscored its struggle to hit the 2 percent inflation target, and bolstered arguments that it had reached the limits of its powers.
Others expect the review to lead to greater efforts by the central bank to stoke inflation and revive growth, whether by doubling down on past methods or trying new tools.
Governor Haruhiko Kuroda has said the central bank wouldn’t consider cutting the overall level of monetary stimulus, while no new ideas are off the table — except for helicopter money, which is illegal in Japan. Many analysts expect the BOJ to stand pat next week. The following is a selection of forecasts for action:
ASSET PURCHASES
The BOJ’s massive purchase of Japanese government bonds — the core of its easing program — has raised questions about how sustainable it is. The BOJ now holds more than one-third of outstanding JGBs, having bought so many that the country’s biggest banks are running out of inventory to sell.
Yet some analysts predict the BOJ will expand purchases of JGBs and risk assets such as exchange-traded funds as Kuroda makes good on his vow to do whatever it takes to reach the inflation target.
MORE J-REITS, RATE CUT
Masaaki Kanno, chief economist at JPMorgan Chase & Co. in Tokyo, said he expects the BOJ to raise its asset-purchase target to 90 trillion yen ($876 billion) a year, from 80 trillion yen, and to buy more risk assets such as real-estate investment trusts, while leaving the volume of JGB purchases unchanged.