Quotes from Bank of Cyprus:
-As Japan is doing everything it can to get out of its deflationary environment, ECB is contemplating on its own QE as deflation risks are becoming more imminent in the near future. However, the BOJ is much ahead of the ECB on its QE programme. It is also ahead in terms of structural reforms that are already under an implementation programme.
-The current weakening momentum that the JPY is engaged in is vital to Japans exit from deflation, since a rise in exports will help corporations to boost production, utilise the participation rate of the women population, increase wages and finally increase capital and consumer spending.
-A weakening JPY is the story here and we expect this to continue, although ECB will try to boost inflation through a more extended QE programme. Until we see any positive outcomes from ECB's actions, we do not see how the current trend will change.
The material has been provided by InstaForex Company – www.instaforex.com