TOKYO -- About a half of foreign exchange specialists in Japan expect the country's central bank to take additional monetary easing measures in the April-June quarter, according to the QUICK Monthly Market Survey in January.
QUICK Corp., a provider of market data within the Nikkei group, conducts a monthly survey of currency specialists at banks, brokerages and other financial institutions as well as some nonfinancial concerns. It asks for outlooks regarding the dollar-yen exchange rate and other important market gauges.
In the special survey for January, respondents were asked where the central banks of Japan, the U.S. and Europe will take their monetary policies, as well as where foreign exchange rates will go this year.
The Bank of Japan, 46% of respondents said, will take additional easing measures between April and June, while 26% said they think the BOJ will wait to soak the country in even more yen until the July-September quarter. The most common answer for the likely timing of the European Central Bank cranking up the euro presses was "between April and June," with 42% of respondents saying so.
The U.S. Federal Reserve this month began scaling back its $85 billion monthly bond purchase program, which it has been using to dump dollars into the American economy. The survey asked the respondents when they think the purchase scheme will end. "Between October and December" was the most popular answer, at 58%.
With these perceptions in mind, the most prevalent forecast for the yen-dollar rate in 2014 has that the yen hitting its highest level against the dollar in May and its lowest point in December. On a simple average, the projected high was 99.7 and the low 111.
"The yen will likely be bought back as Japan's economic recovery slows after the consumption tax hike (in April)," a broker said. "In the second half of this year, however, the yen will start to depreciate again due to the BOJ's additional easing and the government's economic stimulus."
The respondents gave the same forecasts for when the yen will become the strongest and weakest against the euro. They expect the Japanese currency's highest level to be 134 to the euro and its lowest level to be 148.1 on a simple average. As for the euro-dollar rate, many respondents said the euro is reaching its highest level against the U.S. currency this month and that it will ebb to its lowest point in December.
The survey was conducted Jan. 10-16; more than 90 specialists answered it.