- The BOJ held policy steady this month, apparently taking comfort in core inflation staying positive, but Credit Suisse says the rate will turn negative by November, prompting a fresh bout of QE.
- The weaker yen has helped boost inflation of late, says the team, but that effect is wearing off and further weakening is unlikely, especially now that Fed rate hike plans have been pushed off by at least a few months.
- "As such, we see a high likelihood of the BoJ deploying additional easing measures later this year, by which time the central bank will probably be forced to acknowledge that corporate price-setting behavior is being adversely impacted by the threat of the ex-energy core CPI inflation rate dropping into negative territory.”
- Source: Barron's
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