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Too early for further BoJ stimulus in Japan

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JPY regains its strength after the rumours about a potential expansion in the beginning of next week have been swiftly negated. Financial authorities said today that Japan should confer with other nations. An aide to PM Abe, Shibayama said that it’s too soon for the Bank of Japan to take further stimulus measures because the rout in the stock market may be temporary and its causes aren’t domestic.

Shibayama added that the situation has to be evaluated but it is too early. According to Bloomberg, back in October, in the run-up to a BOJ meeting in which policy makers were widely seen as facing a close call on whether to expand stimulus, Shibayama had said it “wouldn’t be strange” if the central bank had stepped things up. The BOJ left its policy unchanged at that meeting.

Shibayama said that secretary Suga and Abe and also Mr. Amari, all of those members, are insisting that Japanese fundamentals are still stable and their attitude probably will not change in a very short period, especially a couple of days.

BOJ will held meeting at 28-29 January.

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