"Keeping expectations high will be extremely difficult for Kuroda"
- Nobuyasu Atago, principal economist at the Japan Center for Economic Research
Japan's machine tool orders dropped significantly last month. However, the situation is expected to improve, as latest BoJ's action should boost investor and business confidence and have a positive impact on willingness to increase spending. A gauge, which measures a change in the total value of new orders placed with machine tool manufacturers, fell 21.6% in March from the same month a year earlier, after a 21.5% slump in the prior month.
Also Tuesday Credit ratings agency Moody's Investors Service said that bold actions by the BoJ will only buy time, but will not improve the overall economic situation or eliminate the country's structural economic problems. Moody's also said that the measures the central bank, led by Haruhiko Kuroda, announced last week will help boost the credit rating of nation's bonds.
"Keeping expectations high will be extremely difficult for Kuroda," said Nobuyasu Atago, principal economist at the Japan Center for Economic Research in Tokyo and a former BOJ official. "The new central bank leadership will probably use the Tankan result as a reason to add monetary stimulus, as they'll argue that the BOJ shouldn't be throwing cold water on business confidence."
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