BoJ expected to add monetary stimulus, US GDP revised up

More monetary stimulus is being expected from the Bank of Japan as a new governor takes over the helm. From Bloomberg:

The Bank of Japan may add monetary stimulus as early as April as prospective governor Haruhiko Kuroda looks to demonstrate a more aggressive approach to tackling 15 years of falling prices.

Kuroda, the current Asian Development Bank president, would take office after Governor Masaaki Shirakawa retires March 19, if confirmed by Parliament following his official nomination yesterday. Analysts at banks from Nomura Holdings Inc. to Mizuho Securities Co. see more easing as soon as an April 3-4 meeting...

“The party has just started,” said Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo, who in January predicted that Kuroda would get the job. “Give us more alcohol and get us excited -- he will do that,” Kanno said of Kuroda, predicting that the bank’s open-ended bond purchases --currently scheduled to begin in January -- will be brought forward to May or June.

Persistent deflation makes further monetary easing likely. A report on Friday showed that Japan's consumer prices excluding fresh food fell 0.2 percent in January from a year earlier, the third consecutive decline.

However, other economic data for Japan released on Friday were mixed. Capital expenditure fell 8.7 percent in the fourth quarter from the previous year but the unemployment rate also fell to 4.2 percent in January from 4.3 percent in December and household spending rose 2.4 percent in January from the previous year, rebounding from a 0.7 percent fall in December.

There had also been mixed data for Japanese manufacturing on Thursday. Factory output increased 1.0 percent in January, slower than the 2.4 percent increase in December. Meanwhile, the purchasing managers survey showed manufacturing contracting in February but at a slower rate, the PMI rising to 48.5 from 47.7 in January.

US economic data on Thursday had been more positive. Fourth quarter GDP growth was revised to show a 0.1 percent expansion from 0.1 percent contraction in the initial estimate. The MNI Chicago Report business barometer rose to 56.8 in February from 55.6 the prior month.