Japanese policy makers are poised to deliver added pro-growth stimulus in the coming months. In our view, it will be a coordinated move, with both fiscal and monetary policy being eased—a supplementary budget of around 1% to 1.5% of gross domestic product (GDP) (5 trillion to 8 trillion yen), funded by the Bank of Japan (BOJ) raising its Japanese government bond (JGB) buying target. We expect these to be in place before the end of May. In our view, the BOJ did not add to its stimulus program precisely because its leadership recognizes the diminishing returns of central bank action on its own. Note that throughout the ... (full story)