- As slumping oil prices keep inflation further away from their 2% target, Bank of Japan policymakers will gather for a rate review this week, to determine if they can hold off on expanding stimulus.
- Back in October, the BOJ justified its unexpected expansion of quantitative and qualitative easing as aimed at preventing oil price falls, and a subsequent slowdown in price rises, from weighing on inflation expectations.
- "By tying its October action to oil moves, the BOJ fell into its own trap," said Izuru Kato, chief economist at Totan Research. "Cheap oil benefits a huge importer like Japan. It's only a problem for the BOJ."
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