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2 Sep 2015
Japanese inflation expectations falling further - Nomura
Fxstreet (Delhi) – Yujiro Goto – Niplc, Research Analyst at Nomura notes that the Japanese inflation expectation amongst the bond investors is declining continuously and the decline shows the continued difficulty of BOJ in lifting inflation expectations to 2%.
Key Quotes
“Inflation expectations among bond investors declined further in August, according to Nikkei Quick. 10yr average inflation expectations slowed to 1.14% from 1.21% the previous month, recording their lowest level since August 2013. 1yr and 2yr expectations also declined to 0.54% and 0.92%, respectively (0.66% and 1.05% the previous month).
“Breakeven inflation expectations have been declining as oil prices have declined, so this further fall in bond investors’ survey-based inflation expectations is unsurprising. Governor Kuroda has been suggesting that the Bank is unlikely to respond to the oil price decline unless it affects the medium-term inflation trend or inflation expectations.”
“Governor Kuroda maintained his optimistic stance on the inflation outlook in his speech last week and the decline in inflation expectations may not lead to any near-term easing by the BOJ.”
Key Quotes
“Inflation expectations among bond investors declined further in August, according to Nikkei Quick. 10yr average inflation expectations slowed to 1.14% from 1.21% the previous month, recording their lowest level since August 2013. 1yr and 2yr expectations also declined to 0.54% and 0.92%, respectively (0.66% and 1.05% the previous month).
“Breakeven inflation expectations have been declining as oil prices have declined, so this further fall in bond investors’ survey-based inflation expectations is unsurprising. Governor Kuroda has been suggesting that the Bank is unlikely to respond to the oil price decline unless it affects the medium-term inflation trend or inflation expectations.”
“Governor Kuroda maintained his optimistic stance on the inflation outlook in his speech last week and the decline in inflation expectations may not lead to any near-term easing by the BOJ.”