What to look for in the BOJ decision later today

Bank of America Merrill Lynch Global Research discusses its expectations for this week's BoJ policy meeting.

"The BoJ board will likely stand pat on monetary policy at the 29-30 July policy meeting. We expect the central bank to keep its rates and risk asset purchase targets unchanged, as widely anticipated.

We think the BoJ will save this bullet for now. Press reports and the minutes/summary of opinions for the April and June policy meetings reveal a more active debate among board members over downside risks to global growth, and whether or not pre-emptive easing measures are warranted," BofAML projects.

"But the risk-off mood in markets has subsided since then; more importantly, USDJPY has been firm, reducing the pressure on the Bank of Japan to act now. We expect the BoJ to leaveits inflation and growth forecasts largely unchanged, sticking to its view that the Japanese economy will continue expanding gradually," BofAML adds.

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