Sticking to the course

The two-day meeting of the Bank of Japan’s Policy Board, which concludes next Friday (20^th), is unlikely to result in any major policy changes, despite the recent flurry of speculation that fresh action is imminent. Indeed, the purely economic case for further monetary stimulus (on top of that already planned) may not become clear until the second half of 2014. Nonetheless, we continue to expect additional easing to be announced at some point next year and would not rule out an earlier more. Also in this Bank of Japan Watch, we assess the room for additional JGB purchases.