BOJ's Amamiya: Doesn't plan to have markets factor in easing in advance

Comments by BOJ deputy governor, Masayoshi Amamiya

• Will aim to have markets understand economic assessment, policy stance
• But doesn't plan to give away signalling action in advance
• Merit to additional easing would be to stimulate the economy
• Demerit to that would be its impact on financial transmission
• Says it is too early to comment on impact of Fed rate cut yesterday

Given that they have limited ammunition, the element of surprise is arguably the only thing that could give the BOJ some added leverage to weaken the yen if they need to do so.

However, once markets digest the lack of effectiveness of their additional easing policies, I reckon the backlash towards the economy and inflation could be brutal unless the BOJ still has an ace up its sleeve.

Anyway, we're still a long way to go before all of this plays out. So, let's see how things evolve in the coming months.