Bank of Japan (BOJ) Governor Kuroda is speaking today, scheduled at 0230GMT

The Wall Street Journal have an ungated article up … What will he say? Here are some likely talking points, based on a close parsing of recent statements by Mr. Kuroda and other BOJ officials.

In brief (but the link to the article is above) … bolding is mine:

  • BOJ worried about growing danger to the progress they’d made over the past year in persuading Japanese consumers, executives, and investors that deflation had been conquered … “there’s a risk that conversion of deflationary mindset, which has so far been progressing steadily, might be delayed.”
  • The dramatic move (on Friday) was needed, in the view of the bare majority of the BOJ’s policy board supporting the move, “to pre-empt manifestation of such risk.”
  • The sharp drop in oil prices was the biggest factor behind the about-face for Mr. Kuroda, who for weeks had been downplaying mounting skepticism about the success of the central bank’s campaign
  • The BOJ is trying to push up expectations and to eradicate the widespread assumption that prices are as likely to fall as rise (aka, “the deflationary mindset.”)
  • Another important message Mr. Kuroda seems to be trying to convey, albeit one he probably won’t state explicitly in the Wednesday speech. He’s more concerned about stoking inflation expectations than waiting for consensus. If he sees a risk to his chief goal, he’ll do what he can, as quickly as he can, even if that irks his skeptics.