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Analysts: BOJ to ease in spring

A solid majority of analysts expect another round of monetary easing measures from the Bank of Japan as early as the spring 2014.  

According to the QUICK corp. survey, 52% of respondents expect the easing to come in Q2 (April-June), while 19% see it happening even earlier, by the end of March. Most economists are not optimistic about the BOJ's 2% inflation target, with 65% seeing its prospects as "low" or "near zero," pointing to the perceived need for more easing. It is necessary to remember that the government plans to hike sales tax to 8% in April, what will negatively impact the economic growth and increase the need for more stimulus.

The expectations for additional BOJ stimulus are strongly contrasting with the US tapering speculations. Such a policy divergence is likely to add fundamental support to the USD/JPY pair in early 2014.


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