BOJ to keep -0.1 percent interest rate, 10-year JGB yield target unchanged next week: Reuters poll
The Bank of Japan is expected to keep its negative interest rates and 10-year government bond yield target unchanged next week after overhauling its policy focus last month, a Reuters poll showed on Friday.
The BOJ is expected to retain the minus 0.1 percent interest rate it imposes on some excess reserves that commercial banks park with the central bank, the poll of 15 analysts found. They forecast the BOJ would also keep its 10-year JGB yield target of around zero percent unchanged.
The poll also showed analysts expect the BOJ to maintain the net amount of Japanese government bonds it buys annually at around 80 trillion yen ($760.96 billion).
In a quarterly evaluation of its forecasts due at next week's policy meeting, the central bank will cut next fiscal year's inflation forecast slightly, reflecting weak consumption and falling import costs from a strong yen, sources have told Reuters.
U.S. Data
U.S. consumer spending rose more than expected in September as households boosted purchases of motor vehicles and inflation increased steadily, which could bolster expectations of an interest rate hike from the Federal Reserve in December.
The Commerce Department said on Monday that consumer spending, which accounts for about 70 percent of U.S. economic activity, increased 0.5 percent after a downwardly revised 0.1 percent drop in August.
Economists polled by Reuters had forecast consumer spending rising 0.4 percent last month. Spending in August was previously reported to have been unchanged.
When adjusted for inflation, consumer spending rose 0.3 percent after falling 0.2 percent in August.
The spending figures were incorporated into last Friday's report on third-quarter gross domestic product. Consumer spending increased at a 2.1 percent annual pace after advancing at a robust 4.3 percent rate in the prior period.
With consumer spending firming, inflation continued to gain steadily. The personal consumption expenditures (PCE) price index increased 0.2 percent after a similar gain in August. In the 12 months through September the PCE price index rose 1.2 percent, the biggest gain since November 2014.
Excluding food and energy, the so-called core PCE price index rose 0.1 percent after rising 0.2 percent in August. In the 12 months through September the core PCE increased 1.7 percent after a similar increase in August.
The core PCE is the Fed's preferred inflation measure and is running below its 2 percent target.
Oil ends at one-month low on OPEC doubts, expected record output
Oil prices settled at one-month lows on Monday after dropping over 3 percent on doubts about OPEC's ability to implement its planned production cuts, with the market further weighed by expectations that the cartel had record output in October.
The Organization of the Petroleum Exporting Countries (OPEC) approved a document on Monday outlining its long-term strategy, a sign its members are achieving consensus on managing production.
But OPEC has achieved little otherwise. Representatives met on Friday in Vienna, and then again on Saturday with their counterparts from non-member producers. They did not reach any specific terms, and sources said Iran has been reluctant to even freeze output.
A Reuters survey found on Monday OPEC's oil output likely hit a record high in October, rising to 33.82 million barrels per day.
Brent's front-month contract LCOc1, which expires after Monday's session, was down $1.41, or 2.8 percent, at $48.30 a barrel. It hit a low of $47.98 during the day.
Reference:Reuters,CNBC
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