The two-day BOJ meeting concludes today, with an announcement expected soon (What time is the Bank of Japan (BOJ) announcement due today? )

Note – there are no expectations of a change in monetary policy from the BOJ today (that I’ve seen, and I’ve consulted widely on this … mind you, maybe there is someone hiding somewhere I haven’t spoken with. Answer yer ****in’ phone will ya?)

Some bank views (bolding is mine):

Citi FX says:

  • their Japan economists expect the BOJ “to cut its inflation outlook to 1.3% from 1.7% for FY2015, while their own expectation for the CPI core index is 0.5% (excluding the effects of the sales tax increase last April)”
  • They cite the recent fall in the price of oil and other commodities, which is likely to weigh on the price growth rate, but will also “contribute to improving the economy more than previously expected,” and as a result,” Citi looks for the BOJ “to upgrade the real GDP growth forecast for the next two fiscal years while leaving the inflation outlook at 2.1% for FY2016 (their own forecast is 1.1%)”
  • Also see room for the BOJ to announce a “one year extension of the ‘Stimulating Bank Lending Facility’ and the ‘Growth-Supporting Funding Facility’ which are presently scheduled to end this March”
  • And to take “several measures to strengthen the facilities”

Meanwhile from Nomura:

  • “The BOJ is very likely to reduce its FY2015 inflation forecast from 1.7%, as oil prices have declined since October; the magnitude of this reduction is worth monitoring. QQE expansion in October boosted inflation expectations, but the impact was short-lived as oil prices continued to decline.”
  • “… A larger reduction of its inflation forecast would likely increase market expectations of earlier BOJ easing, while easing expectations into the April meeting have already increased slightly, according to Bloomberg.”
  • “As inflation momentum slows, the BOJ may decide to extend the deadline of its two loan support programmes and/or expand the size of these programmes this week. The BOJ expanded the size of its loan support programmes last February, which supported USD/JPY, and a decision to extend these programs in January could be viewed as a swift move. Even though extending the deadline would not be a positive for USD/JPY, if the Bank also expands the size of the programme, the decision could be supportive of USD/JPY in the near term.”