Bank of Japan governor Kuroda begins his press conference 29 July

  • economy likely to expand moderately as a trend
  • today's policy steps and govt fiscal stimulus to provide synergy effects on economy
  • CPI likely to reach 2% during FY 2017
  • Will take additional easing steps if necessary to achieve price target

Doesn't sound like he's in any rush to do so.

USDJPY lower at 103.35

  • will continue QQE with neg rates as long as needed to meet price goal
  • will examine BOJ policy regarding what is necessary in future to meet 2% price target
  • govt's economic package is appropriate in helping to achieve BOJ's inflation target
  • doesn't think QQE has reached its limits
  • room for deeper negative rates

Room for it but will they do it ?

Traders less than convinced with USDJPY still 103.34

  • BOJ holds about 1/3 of JGBs so 2/3 still in open market
  • increase in ETF purchases, dollar funding provision most appropriate policy steps for now

Hardly ramping up the rate cut stakes.