BOJ policy meeting market focus today april 23 2012

BOJ policy meeting market focus today april 23 2012, Bank of Japan policy board meeting april 23 2012 ; This week may bring an answer to one of the most pressing questions in financial markets: Will Japan's central bank ramp up efforts to bolster the country's moribund economy and tamp down the rising yen?

The Bank of Japan meets on Friday amid strong political pressure to announce easing measures, such as a new round of bond buying. The hope is that pumping more yen into the markets will stimulate the economy and put pressure on the currency. Policy makers also face a currency market that is largely betting on an easing.

The bank's previous three meetings have caught traders off guard and sent the yen alternately lower, then higher. In February, traders were surprised when the bank launched a big bond-buying program, only to be disappointed in March and early April, when two meetings passed without a follow-up move.

But many appear to still be betting that the Bank of Japan will expand its bond-buying program. And BOJ officials, including the governor and deputy governor, began signaling last week that more could be coming.

"It's very hard to imagine that the BOJ will take no new easing measures at the coming meeting, If the BOJ chooses to pump more money into the economy, the yen probably will resume its slide, investors and strategists said. That would be good news for the economy, especially for big manufacturers that increasingly rely on overseas sales to feed their growth as Japan's market shrinks.

Those who believe the BOJ will stand pat argue that the bank probably will want to wait longer to see how its February round of easing pans out. Economists argue that the bank should also limit its monetizing of the country's debt load—efforts to increase the money supply, goosing the economy and driving down the yen, by buying debt issued by the government. Japan's national debt now stands at more than 200% of annual economic output.

Greg Anderson, a senior foreign-exchange strategist at Citigroup in New York, said he sees a 70% chance the BOJ will ease.

At State Street Global Advisors, Collin Crownover puts the chances of an easing at 50%. Still Mr. Crownover, the firm's global head of currency management, said he thinks the yen is headed lower because the U.S. economy will strengthen, driving the dollar higher relative to the yen.

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