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25 Feb 2013
Forex Flash: Kuroda has been critical of BoJ since early 2000´s - Nomura
Nomura Strategist Yujiro Goto notes that BoJ Governor favourite Haruhiko Kuroda has been sayiing that BOJ monetary easing has been too little and too late since the early 2000´s.
Thus, he feels that pending his appointment, the BoJ will be lead by one of its fiercest critics. Goto comments that Kuroda emphasises the importance of ´unlimited´ asset purchases to achieve the 2% inflation target and thus, he feels that the BOJ may start open-ended/unlimited asset purchases earlier than currently scheduled (2014).
Further, he feels that the Bank´s communication policy may change again under Mr. Kuroda. At the same time, Mr. Kuroda has been negative on the foreign bond-buying operation by the BOJ, even though the MOF intervened in the FX market when he headed the MOF‟s international affairs department. He writes, “The BOJ may not embark on a foreign bond-buying operation in the near future and the BOJ‟s balance sheet expansion will focus on domestic asset purchases. The BOJ‟s foreign bond-buying possibility has already decreased significantly since the G7 statement and thus this may not be a negative surprise to the market.”
Thus, he feels that pending his appointment, the BoJ will be lead by one of its fiercest critics. Goto comments that Kuroda emphasises the importance of ´unlimited´ asset purchases to achieve the 2% inflation target and thus, he feels that the BOJ may start open-ended/unlimited asset purchases earlier than currently scheduled (2014).
Further, he feels that the Bank´s communication policy may change again under Mr. Kuroda. At the same time, Mr. Kuroda has been negative on the foreign bond-buying operation by the BOJ, even though the MOF intervened in the FX market when he headed the MOF‟s international affairs department. He writes, “The BOJ may not embark on a foreign bond-buying operation in the near future and the BOJ‟s balance sheet expansion will focus on domestic asset purchases. The BOJ‟s foreign bond-buying possibility has already decreased significantly since the G7 statement and thus this may not be a negative surprise to the market.”