The Bank of Japan (BOJ) two-day monetary policy meeting concludes today. It will be followed by an announcement at its conclusion, and later by a press conference from governor Kuroda (0630GMT).
There is no scheduled time for the end-of-meeting BOJ announcement, it comes at the conclusion of the meeting, whenever that will be.
Ordinarily it can be expected sometime in the 0300-0500GMT window, but as I am not expecting any policy changes at all to be announced (steady as she goes with the easing) the announcement could come a little earlier. While no change to policy is expected, this meeting gives the opportunity for the board to review its assessment of the Japanese economy, so we should get a clearer picture of what they are thinking and the direction for future policy. It has been a widespread market expectation that the BOJ will be easing further after the sales tax hike in April (some economists even thinking further easing may come before then, in February or March).
Something to watch is that if the BOJ shows more optimism in their economic and inflation forecasts, the current expectations for an early easing will decrease. This should see the USD/JPY and the Nikkei decline. I suspect the dip buyers to come back in soon, though.
Current BOJ inflation forecasts (which are expected to remain the same):
- For inflation to reach 1.3% in fiscal year 2014 and 1.9% in fiscal year 2015
- These are more optimistic than private sector forecasts, but given that inflation momentum has been strong these are unlikely to be downgraded today. I suspect at some stage, though, they may well have to be.
Governor Kuroda’s press conference follows (which is scheduled for 0630GMT). Kuroda is likely to reiterate his optimistic view that the economy is on track to achieve 2% inflation.
