Expectations that the Bank of Japan will announce a further increase in asset purchases alongside the publication of updated economic forecasts on Friday are now so high that the Policy Board will have to loosen policy again or risk reversing the remaining benefits from the changes announced in February. Extending the horizon of the APP would allow the Bank to announce a bigger increase in JGB purchases. But it is doubtful whether this would have any lasting effect on market sentiment, let alone prices or activity in the real economy.
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