The BoJ voted to maintain its policy at yesterday’s MPM, one year after itintroduced QQE. We think the BoJ will decide when to ease further based on(1) coordination with the government’s economic policy, (2) receding inflationexpectations, and (3) a surprise effect. Easing further at yesterday’s meetingprobably would not have been out of the question if the BoJ was only aimingfor a surprise effect. But, the BoJ would not have fulfilled its accountability inthe conduct of policy action in the absence of points (1) and (2).
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