Antony Barton over at LiveSquawk (free trial here) has commentary from Goldman Sachs on further steps Japan is likely to take
- Japan may show more credible commitment to inflate economy by taking permanent fiscal expansion steps together with expansion and/or extension of duration of JGB purchases by the Bank of Japan
- This could be a pretty strong policy mix that may help to boost inflation expectations; a more open coordination of fiscal and monetary authority would make it explicit that policy makers are willing to monetize part of debt and any fiscal expansion announced by government
- Its striking that markets aren't pricing this scenario at all
- A larger deficit-to-GDP ratio could be more openly funded by a further expansion of QQE program via purchases of long-dated JGBs: negative bond yields across maturity structure also make fiscal expansion much less costly
- Expects USD/JPY to move higher again in near term and maintains its forecast at 130 in 12 months.
(Bolding mine)