The BOJ meets again later this week and will be announcing its latest decision on any monetary policy changes on Thursday
The Japanese central bank is expected to leave key rates unchanged and maintain monetary policy as per the March meeting decision, alongside its already downgraded assessment at the time. In that light, the major focus of the meeting this week will be on the latest economic forecasts provided by the central bank.
It will be the first time that the BOJ will provide forecasts for GDP and CPI for the fiscal year running through 2021/22. As noted by a report earlier this week, they are still expected to forecast that inflation will stay under its 2% target until then.
At the same time, the BOJ is quite possibly going to cut its economic forecasts for the fiscal year 2019/20 as domestic and global headwinds continue to weigh on the Japanese economy as we begin the new year. For some context, the forecasts made by the BOJ back in January can be found here.
I would expect the decision and outlook report to be of minimal impact to the yen but the downgrade in economic forecasts could weigh a little on the currency later on Thursday. BOJ governor Kuroda's press conference will follow the decision but I wouldn't expect him to deviate from the current script as the BOJ continues to play it safe, with the government looking to still carry on with their sales tax hike in October this year.
