Yes, its BOJ day! Here are a few posts I prepared earlier
- What time is BOJ announcement today? There is one man on the planet who knows.
- Ahead of the BOJ today - household consumption strongest in 7 months?
- BOJ monetary policy announcement due Friday - preview
In a nutshell, what to expect from the BOJ today ... its likely to keep policy unchanged (and to keep it so in the near term)
- To hold short-term rate at -0.1%
- To keep the target for the 10-year Japanese government bond (JGB) yield at around 0%
- To keep steady its purchases of exchange-traded funds and real estate investment trusts
And:
- The Bank is likely to maintain its outlook for growth to remain above potential through the next fiscal year (potential is assessed around 0.7%, despite the most recent update on GDP coming in lower than expected & lower than preliminary indications its still above 0.7%)
- And to say this will drive reflation
Something to watch for is the potential for the Bank to boost its outlook for the economy (its economic assessment). Recent economic developments have, on balance, been mostly positive:
- Strong exports ... contributing to stronger industrial output
- Corporate profits ... these are high and rising
- Capex is, on balance, looking up but it's a mixed bag with some signs of weakness
- A tight (& getting ever more so) labour market (the most recent job-to-applicant ratio is at its tightest since 1974) is (very, very slowly) supporting wages (plenty of progress still to be made here though)
- The BOJ's own consumption activity index (most recent data from April 2017) is at its highest since March 2014. And check out yesterday's Cabinet office "Synthetic Consumption Index", which showed the biggest increase in 7 months
- Softer oil prices are weighing on progress towards the bank's 2% inflation target.
Expect the announcement to hit sometime around 0230 to 0330GMT. Governor Kuroda will hold a press conference following, that is scheduled for 0630GMT.
