TOKYO, Aug 4 (Reuters): The Bank of Japan (BOJ) is set to maintain its massive asset purchases and its optimistic view on the economic outlook this week, unfazed by a slew of weak data that has heightened expectations of a deeper-than-expected contraction in the second quarter.
Some BOJ policymakers may propose offering a bleaker view on exports and output than last month, given the recent gloomy data that cast doubt on its projection that the economy will fairly quickly ride out the pain from a sales tax hike in April.
But Governor Haruhiko Kuroda's resolutely upbeat forecasts are expected to prevail, and changes in the BOJ's language, if any, will be minor and unlikely to signal the chance of further monetary loosening in the near-term.
Many on the policy board still cling to hope that a rebound in US and Chinese demand will gradually start to lift exports, sources familiar with the central bank's thinking said.
Some analysts, however, warn that the BOJ risks being seen as out of touch with reality if it were to maintain its optimistic view that export growth remains "flat" and output "continues to rise moderately as a trend."
"The export and output figures must have been pretty disappointing for the BOJ, so I would expect it to revise down its assessment for these components," said Yasuo Yamamoto, senior economist at Mizuho Research Institute.
BOJ to keep upbeat economic view
FE Team | Published: August 05, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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