The main planks of monetary policy are expected to remain unchanged:

  • short-term interest rate target at -0.1%
  • 10-year bond yields target around 0%

SMBC Nikko:

  • "The BOJ could upgrade its price forecast but will still project inflation to remain around 1.5% in fiscal 2023,"
  • "That means a tweak to the BOJ's rate policy is off the cards this year."

The higher CPI forecast is expected due to the impact of higher raw material costs being passed down to consumers.

Higher forecasts will be caveated with warnings on the recent spike in Omicron coronavirus cases. A moderate recovery for the economy will be expected.

Remember this from last week?