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Fiscal stimulus was the initial announcement on this earlier this month, in the wake of the Upper House elections that sparked the initial weakening of the yen. Reports also suggest that this will be approved by the cabinet on 2nd August next week. With this confirmed, this could reduce the chances of further stimulus from the BoJ at the end of this week. Expectations are for a further cut of rates into negative territory, together with a further increase in the monthly expansion of the monetary base, but the BoJ could choose to keep its power dry and give fiscal policy the chance to work.
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