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Forex pairs in this Article » (Barcelona) - Takahiro Sekido, Japan Strategist at the Bank of Tokyo Mitsubishi UFJ suspects that policy mix ahead could build the foundations for structural reform as 'Abenomics' takes hold of the Japanese economy.

He is expecting that the BoJ will change its monetary expansion format plan to monthly basis figures, with the reason that the next governor should report his achievements to the Council of Economic and Fiscal Policy (CEFP) on a quarterly basis. Once the next governor changes the policy stance to be more accommodative, then he can flexibly change and fine-tune the policy settings.

He notes that the recent yen depreciation set the fastest pace of the 2000s and against the present depreciated level of the yen, he does not expect that the next governor will present an idea to implement a joint fund to purchase foreign bonds, even though that is in line with the manifesto of the LDP. However, he feels that in the growth strategy to be released in June, the government would like to support the Japanese corporate sector so as to enhance its potential growth capacity not only in the domestic market but also overseas.

The BoJ's newly launched fund, the Loan Support Program (LSP) to support Japanese banks' lending activities will support overseas investments based on real business demands. Sekeido notes that the first auction of the LSP will be held in June. He writes, "The LSP will be one of the pieces in the growth strategy of the Abe administration, we expect. It will be a symbol of the cooperative relationship between the government and the BoJ. The CEFP is supported by the bureaucrats of METI. The concept and integration will be matched with the brainpower of CEFP, we expect."
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