HSBC on the Bank of Japan meeting, announcement due from 0230 GMT Tuesday 23 January 2018

  • Underlying inflation pressures have been absent so far, despite positive q-o-q growth for seven consecutive quarters. Strong economic activity is not translating into higher prices, with wage growth showing limited signs of acceleration due to various structural factors.
  • Consequently, the BoJ is likely to maintain its extremely easy monetary policy in the foreseeable future, as a premature pullback will dampen medium-term inflation expectations and also result in a notable correction in financial market instruments including the value of the yen.

And also on the 'Outlook' report that'll be published by the Bank at the same time as the policy announcement:

  • Meanwhile, this is likely to push the Bank's real GDP forecast for FY2018 slightly higher from the current 1.4%. Market participants will be closely watch whether the Bank keeps its optimistic core CPI forecast of 1.4% for FY2018, while we see risks that this could be marked marginally lower.

I posted previews previously:

From those, and everything else its clear there are zero expectations of any policy change from the Bank.

I am awaiting an acknowledgement from the Bank of an end to the 80tln yen JGB buy target - as I have said previously (ad nauseum), its irrelevant under the YCC policy, and is in practice being ignoed by the Bank. I been sayin' that for months and so far no joy from Mr. Kuroda on renouncing that part of policy.