MNI INSIGHT: BOJ Eyes On Forex Move; Corp Funding In Focus

By Hiroshi Inoue

     TOKYO (MNI) - The Bank of Japan could consider further policy moves sooner

than the mid-March meeting, perhaps early next week, so as to keep step with

fresh government moves to support corporate funding measures that are expected

Tuesday, MNI understands.

     In a rapidly evolving environment with volatile financial markets, a

strengthening yen and rapid policy moves by other central banks, the BOJ could

boost funding to the real economy and consider additional easing measures.

     --STRONGER YEN WORRY

     The yen's rise remains the most troublesome factor for the BOJ and would

prompt the BOJ to consider further cuts in the overnight rate from the current

-0.10%, although it remains sensitive to the side effects and the impact on

banks.

     As of 0615GMT, the dollar traded at around JPY105.95,, having traded at

JPY105.75, the lowest level since September 2019 and moving fast towards levels

that create unease at the BOJ.

     Among fresh stability measures that could be announced are greater

flexibility in the purchases of ETFs, commercial paper and corporate bonds, and

the BOJ could even increase the size of the buying programme.

     Although BOJ economists would like to wait for a better look at first

quarter data before recommending policy changes, but officials across the bank

accept time may not be on its side and policy measures will be needed sooner.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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