The Bank of Japan (BOJ) meets today (6 October) and tomorrow (7th) and will announce their decision once the two-day meeting concludes.
Market expectations are nearly unanimous that there will be change from the BOJ at this meeting, with policy on hold.
Looking further ahead, there is a review of the economy due from the BOJ on October 31, with updated economic forecasts due from them then. (The BOJ produces a twice-yearly outlook report on the economy and prices in April and October, with reviews of these forecasts in January and July.)
Nevertheless, there will be plenty to discuss on the economy at this week’s meeting:
- Inflation seems to have leveled off … well, actually its started to fall (check out the chart at the bottom of this post)
- Industrial production is continuing weak
- Even as recently as the weekend, the government recognises the weakness in the economy
- The economy’s rebound from the Q2 contraction has been delayed by the April tax hike & bad summer weather impacting on household spending
Having said all this, expectations from this week’s meeting are, as I said, no change. The thing to watch for will be for changes in language about the economy that may give us a hint of more easing to come, and when. But even this is seemingly in doubt, with talk in the market last week that the Bank of Japan may consider a flexible time frame for 2% inflation target
Stay tuned!
