Policy Board on a roll after launch of QE5

The Bank of Japan is likely to have been pleased with the market response to the policy measures it announced in February, especially as neither the additional asset purchases nor the tweaks to the language on the price stability target were quite as big a deal as many have suggested. The favourable moves in the yen and Japanese equities would also not have been so large without the helpful developments overseas. But to maintain the positive momentum at the March meeting, which concludes next Tuesday (13th), we expect the Policy Board to unveil an extension of the “Fund- Provisioning Measure to Support Strengthening the Foundations for Economic Growth”.