Comments on the RBA Minutes and the BOJ announcement, both due today

This is via Sean Callow at Westpac in Sydney (bolding is mine)

RBA minutes:

  • The minutes from the RBA Board's March meeting are due at 11:30am AEDT/8:30am Sing/HK.
  • The steady hand at 2.0% was accompanied by a reiteration of the lukewarm optimism of Feb: "there were reasonable prospects for continued growth in the economy."
  • There was little change in the AUD commentary: "The exchange rate has been adjusting to the evolving economic outlook."
  • What caught market attention though was a tweak in the final sentence, from "Continued low inflation may provide scope for easier policy" to "Continued low inflation would provide scope." Our economics team suspects this was a slightly firmer easing bias in case of a weak Q4 GDP report. As it turned out of course, the GDP data the next day was much stronger than expected.

BOJ meeting

  • There is minimal expectation of a change of policy from the Bank of Japan today.
  • There is no fixed time as usual, with an announcement potentially any time from 11:30am Tokyo but most decisions released within 12:00-12:30pm Tokyo/2-2:30pm Syd/11-11:30am Sing/HK.
  • Japan's economic momentum remains sluggish but the recovery in oil prices since the 29 January meeting offers a glimmer of hope that headline CPI will pick up a little sooner than they might have thought at that meeting.
  • But the main focus is likely to be on the press conference at 3:30pm Tokyo when Governor Kuroda should be keen to stress the scope for deposit rates to become more negative (now -0.1%), after the EUR rally in response to Draghi's comments last week. Even so, Kuroda will face some awkward questions on why the yen is significantly stronger now than before negative rates were revealed.