BOJ's Kuroda speaking to parliament again today
- QQE with negative interest rates exerting intended effects on economy
- Unavoidable for monetary easing steps to affect banks' earnings
- Declines in bank stocks, expansion of credit spread due to investors' risk aversion, happening in other countries too
- Technically possible to push interest rates further into negative territory
- Can't say now by how much BOJ can push rates deeper into negative territory as depends on impact on banks' earnings, cost of holding cash
- Now is time to scrutinise policy effect of latest decision to adopt 0.1 pct negative rate
Earlier on we got inflation data from Japan, showing little progress really.
USD/JPY is higher since then.
Which makes for a nice narrative .. 'Yen weaker as BOJ needs to do more on inflation'. that'll be the explanation you'll be hearing later. its B/S but it has a nice logic to it at least.
