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MUFG on BOJ Policy, the Yen and the snap......>

JAPAN
JAPAN: MUFG on BOJ Policy, the Yen and the snap election:
- The yen remains on track to be one of the worst performing currencies so far
this month and this year, weakness is attributed to global strength in yields on
the back of hawkish rhetoric from the Fed and more lightly the BOE and the ECB.
JGB yields have remained more stable as the BOJ remain committed to a target of
0.0% for the 10-Year yield with no inclination from the BOJ toward an adjustment
in the foreseeable future.
- Underlying inflation is expected to continue to firm in the coming months
although it appears risks are slightly in favour of inflation coming in weaker
than the BoJ's forecast for the current fiscal year. 'The inflation outlook
should not encourage the BoJ to shift from the current dovish policy stance.'
- MUFG say the main risks to BoJ policy are the future of main leaders, Governor
Kuroda of the BoJ's term expires in April next year and impending is the snap
election called by President Abe after he gained support for his poise during
the N. Korea crisis, since then circumstances have changed; the N. Korea crisis
has mildly settled and new party 'Party of Hope' has increased competition.

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