A majority of economists now see the Bank of Japan expanding its stimulus as its next move, with a strengthening of the yen from Federal Reserve rate cuts seen as a key factor for triggering action, according to a Bloomberg survey.

While all 50 polled economists expect no policy change at the two-day meeting ending Thursday, 62 percent of them think the central bank will ramp up easing measures as its next step, compared with 48 percent in April, the survey showed.

Economists said that against a backdrop of economic weakness, a sharp strengthening of the yen after U.S. rate cuts would trigger action from the BOJ. They predicted the yen would strengthen to ¥105 if the Fed starts lowering rates and that it would need to hit ¥100 to trigger action. The dollar was trading at ¥108.3 on Friday afternoon.

A stronger yen would put downward pressure on prices through cheaper imports and cool sentiment among companies and households, weakening upward price momentum that the BOJ sees as critical to its mission to generate stable inflation.

BOJ Gov. Haruhiko Kuroda said last week that the BOJ must respond swiftly if price momentum is lost and that the bank still had scope to unleash big stimulus. He added that the current state of the economy didn’t warrant more action.

Still, movements following possible Fed rate cuts could sway Kuroda’s position. Some 60 percent of the polled economists said they expected extra stimulus from the BOJ within six months of the Fed lowering its benchmark rates.

The survey also showed that speculation has further cooled that Prime Minister Shinzo Abe will postpone a sales tax hike scheduled for October. More than 8 of 10 economists expect the increase to go ahead as planned.

Japan’s gross domestic product expanded a better-than-expected 2.2 percent in the first quarter, offering support for the government’s view that the economy is holding up relatively well despite a global slowdown and trade tensions. Abe has also included the plan in his party’s platform for a July election.

Still, economists expect the government to go beyond the countermeasures already unveiled to offset the negative hit to the economy from the higher tax rate. Some 92 percent of respondents said the government would take additional measures to support the economy through the tax increase.

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