"The trend for prices is weak and that's a concern. The outlook for overseas economies is also highly uncertain"
- One of the sources, who spoke on condition of anonymity due to the sensitivity of the matter
The Bank of Japan will consider easing its monetary policy again in January, to boost growth in the struggling economy. The easing is widely expected to be done in the form of another increase in the BOJ's 101 trillion yen ($1 trillion) asset buying and lending programme. After claiming his readiness for bold actions and threatening the BoJ, Japanese new Prime Minister Shinzo Abe starts to realize his intentions. He said earlier that a flexible fiscal policy was one of the three pillars of his economic strategy. At the same time, the BoJ will likely adopt a new 2% inflation target, double its current price goal.
"The trend for prices is weak and that's a concern. The outlook for overseas economies is also highly uncertain," said one of the sources, who spoke on condition of anonymity due to the sensitivity of the matter.
"The scale of this budget suggests that Abe's new administration is serious about stimulating the economy," said Masamichi Adachi, a senior economist at JPMorgan Securities in Tokyo and a former central bank official. "It'll be very helpful in the near-time, but the problem in the medium-to-long term is that we have to pay this back."
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