The minutes from the Bank of Japan’s November meeting were released this week. Policymakers debated various options, such as an open-ended commitment to buy assets, Reuters reports.
“The minutes showed a shift in the policy stance of some members a month before the BOJ decided to take additional easing steps and amid strong requests from incoming Prime Minister Shinzo Abe to do more to beat deflation,” Dow Jones Newswires adds.
“It is widely known that Japanese equities offer good value, but the strong yen continues to suffocate growth and sustain price deflation. Hence, the precondition to unlocking the Nikkei’s value is to reflate the economy and end deflation, both of which will require a substantial devaluation in the yen,” analysts at Janney Montgomery Scott said in a note Wednesday.
“Subsequently, the Bank of Japan has responded by becoming more aggressive, with more easing likely for 2013. The announced BoJ balance sheet expansion would be closely in line with the projected expansion of the Fed’s balance sheet in 2013,” they wrote. “Thus, it is difficult to continue to make the case that the BoJ is lagging other developed central banks in terms of the size of its quantitative easing program. These developments are bullish for Japanese equities and may finally weaken the yen on a sustainable basis and help end deflation.”
CurrencyShares Japanese Yen Trust
