The Bank of Japan July policy announcement is due Tuesday along with an update to their Outlook for the Japanese economy

I have posted up previews already (ICYMI)

Preview via Nomura:

  • BOJ monetary policy meeting ; Outlook for Economic Activity and Prices
  • We expect the BOJ to justify prolonging the current monetary easing policy and also start a discussion on letting its policy become more flexible to mitigate side-effects.

More (a lot of detail, bolding mine):

We expect the BOJ to leave monetary policy unchanged

  • On 20-22 July, a number of media outlets including Jiji Press and Reuters reported that the BOJ could discuss adopting a more flexible monetary policy. However, in view of the increased focus on the side effects of the current easing policy on earnings at financial institutions, we think all that will happen at the upcoming meeting is that methods of making adjustments toward a more flexible monetary policy will be debated and considered, and that there will be no immediate change in policy.

In the Outlook for Economic Activity and Prices (Outlook Report), which will be released at the same time,

  • we think the main focus will be on an analysis of the factors behind the inflation rate remaining lacklustre
  • Based on recent communication from the BOJ, we think it likely that the waning impact from hysteresis is likely to be noted as the main reason for sluggish inflation ( … refers to the waning effects over time of the decline in supply capacity as employment and investment are reined in as a result of an economic downturn, and increased supply capacity easing the upward pressure on prices from stronger demand).
  • However, these reversal effects do not continue forever and taking a longer-term perspective, it could also be possible to claim that inflation momentum will recover as the effects of easing emerge.
  • we think the BOJ will justify prolonging the current monetary easing policy and underscore the validity of taking a more flexible approach to easing in order to lessen the side effects on earnings at financial institutions that have cumulatively built due to the prolonged easing.

We forecast the core inflation projections for FY18 and FY19 (excluding the effect of an increase in the consumption tax rate) in the Outlook Report will each be lowered by 0.3pp.

  • We think the projection for FY20 will be maintained at +1.8%, as in the April Outlook Report.
  • We forecast that the projection for GDP growth in FY18 will be lowered slightly, reflecting the decline in January-March 2018 and the carryover effect from that, but that the growth projections for FY19 and FY20 will be maintained.

A key point is how the above debate related to taking a more flexible approach to monetary policy is described in the post-meeting statement (or sometimes in the Outlook Report), including whether it is actually mentioned. Similarly, a key point in the governor's post-meeting press conference will be how specific his statements are on what was discussed about adopting a more flexible monetary policy and specific ways to do this. We think these points will also be a litmus test for gauging when a decision will be taken to change the guideline for market operations to pave the way toward a more flexible approach to monetary policy.

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Note, BOJ Governor Kuroda's press conference will begin at 0630GMT

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And that is not all on the agenda, there is NZ and Australian data also:

AND, another big one - China PMIs!