Via Scotia, preview comments on what to expect from the Bank of Japan.
Out of 46 forecasters within consensus, only 9 expect a hike.
Markets are assigning a higher probability to a 10bps hike that has been floating around 70% odds with about 7bps priced.
The case for hiking rests entirely upon gauging the degree of the BoJ’s confidence that it is durably on the path toward achieving 2% inflation over the medium-term horizon while getting further distance away from the distorting near-zero policy rate of 10bps.
I’m not sure they should have such confidence.
- Tokyo core CPI just reversed prior progress toward firmer readings which sends a cautious signal
- The yen has sharply appreciated in a very short period of time
- There is little evidence that Japan is escaping the grips of falling real wages
- While the annual Shunto rounds of negotiations with unions has driven a sharp acceleration of wage growth over the past two years, this has a concentrated effect on less than 20% of Japanese workers and the evidence this is spilling over into lifting wages elsewhere is very limited.
- Oil prices have ebbed somewhat of late but more importantly have been broadly trended sideways through much of the year; since Japan imports so much, the pass through to inflation risk has ebbed
![BoJ](https://images.forexlive.com/images/BoJ_id_a62e7baa-249b-4b72-a222-3f099238f7f2_size900.jpeg)
The BoJ is meeting today and tomorrow. The statement is expected sometime between 0230 and 0330 GMT on Wednesday, July 31, 2024
- that's 2230 - 2330 US Eastern time on Tuesday, July 30, 2024
Bank of Japan Governor Ueda follows up with his press conference @ 0630 GMT (0230 US Eastern time).