Further BoJ easing is unlikely in the near term

It is believed that further BoJ easing is unlikely in the near term. Additional easing is expected only in next April when the Bank faces its self-imposed deadline for 2% inflation and 2016 Shunto results become clearer. The BoJ is likely to remain constructive on the growth and inflation outlook waiting for global headwinds to subside. Indeed, BoJ's newly introduced measure of CPI (excluding fresh food and energy) accelerated to +0.9% y/y in July from Jan-Feb bottom of +0.4% whereas core CPI (excluding fresh food) decelerated to flat y/y. 

Governor Kuroda expressed that further yen weakness may not be indispensable to achieving 2% inflation given the tightening output gap, relatively solid inflation expectations, labor income growth, and changes in corporate pricing behaviour, at press conference at 15 September BoJ meeting.