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5 Apr 2013
Forex Flash: The BOJ plan is really a doubling down on the previous LDP strategy - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts believe that in a nutshell, the BoJ plan is really just a double down on the previous LDP strategy.
They note that it will be buying about JPY7.4 trln in JGBS, up from about JPY4 trln now and will increase the average maturity from 3 years to 7. Further, they add that it intends to increase its monetary base from JPY138 trln at the end of last year to JPY200 trln by the end of this year and JPY270 trln by the end of next year. They write, “This will be largely reserve deposits which will rise from JPY47 trln to JPY175 trln.”
They note that it will be buying about JPY7.4 trln in JGBS, up from about JPY4 trln now and will increase the average maturity from 3 years to 7. Further, they add that it intends to increase its monetary base from JPY138 trln at the end of last year to JPY200 trln by the end of this year and JPY270 trln by the end of next year. They write, “This will be largely reserve deposits which will rise from JPY47 trln to JPY175 trln.”