The Bank of Japan's next policy move will unwind, rather than strengthen, its massive monetary easing, according to more than 90% of economists polled by Reuters, though most said the change was unlikely before the latter half of 2023.
Twenty-four of 26 economists in the Nov 15-25 poll said the BOJ's next action, if any, would be "unwinding its ultra-easy monetary policy".
"Unlike in the U.S. or Europe, the BOJ has no reason to hasten a tightening, since the yen's weakening pace has slowed down and consumer inflation here remains modest when food and energy items are not counted." BOJ watchers were almost evenly divided when asked about the need to revise a joint statement set in 2013 between the Japanese government and the central bank. Widely known as the policy accord, it requires the central bank to achieve its 2% inflation target "at the earliest date possible."Among those who wanted a revision, seven called for more flexibly judging achievement of the inflation target. BOJ leaders have said "sustainable and stable" 2% inflation is needed.
Two economists in the poll said the accord should simply be abolished. "Japan's economy is no longer in deflation" unlike when the policymakers crafted the agreement nine years ago, said Nobuyasu Atago, chief economist at Ichiyoshi Securities.Another question asked how long the yen would be at risk of weakening against the U.S. dollar. Twelve of 26 economists said it would until the end of this year, while eight thought the risk would last "until the first half of 2023".
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