Japan likely to introduce fiscal stimulus package

May 23, 2016

During the upcoming G7 summit in Japan on 26-27 May, Japan is likely to lead the flexible fiscal policy management, said Barclays in a research report. Japan’s public sector expenditure is likely to be normal again post three years of strong investment after the Tohoku earthquake.

Meanwhile, the consumption tax is set to be raised in FY 2017. The combination of both might set off a contraction in fiscal policy in FY 2016 and FY 2017, as seen in 2012 “fiscal cliff” in the US, noted Barclays.

Japan is likely to bring in a fiscal stimulus package to avert this. The package will be financed by a range of supplementary budgets and a delay in the hike of consumption tax. The forthcoming G7 summit might give the appropriate setting for Japan to announce such plans and also look for international coordination of fiscal policy, according to Barclays.

Moreover, the Bank of Japan is likely to further ease monetary policy. With the BoJ’s limited scope in terms of additional easing, there is a possibility of incremental action, added Barclays.

“At the July MPM, we expect the BoJ to pursue additional qualitative easing via an expansion of ETF and J-REIT purchases and a deepening of NIRP to -30bp from -10bp currently”, said Barclays.

It is unlikely that inflation expectations will rise significantly from these measures and hence see a threat that the Japanese central bank might undertake measures more aggressively than expected.

Publication source
Vinson Financials Ltd information  Vinson Financials Ltd reviews

January 23, 2017
Japanese Yen is taking the heat
Looking at the daily chart of the Japanese Yen, we can see that the bullish engulfing has formed next to the 50% Fibonacci level, which has been broken on the weekly chart at the points of 125.853 and 98.935...
January 23, 2017
Main Macro Events This Week
President Trump has his feet under the desk in the Oval office and the tone of his inaugural speech and actions over the weekend reiterated his campaign themes to Make America Great Again...
January 23, 2017
UK stocks start the week on the back foot
The FTSE100 is under some selling pressure this morning and trading lower by around 40 points. The leading UK stock index posted its first weekly loss in over a month on Friday and has continued lower out the gate today. The pound is broadly higher on the day and has moved back above the 1.24 handle against the US dollar...

OctaFX Rating
EXNESS Rating
FxPro Rating
Grand Capital Rating
HotForex Rating
Orbex Rating

UKoptions Rating
EZTrader Rating
24option Rating
Banc De Binary Rating
Porter Finance Rating
Binary.com Rating