Yen found strength in the very early hours of Asia on the back of a weekend report canvassing changes to the BOJ 2% inflation target once Bank of Japan Governor Kuroda leaves his role in April in 2023:
- Monday morning forex open early indications - 19 December 2022 (BOJ chatter boosting yen)
- Weekend report on BOJ's 2% inflation target: "more flexible" (ps. not until April 2023)
Ahead of all that, of course, is the BOJ policy meeting Monday and Tuesday (Japan time). The Statement will be published Tuesday, 20 December 2022 around 0230 to 0330 GMT (there is no firmly scheduled time for the BOJ to release its statement, that time window is an excellent bet though if you are setting an alarm).
Bank of Japan Governor Kuroda speaks at 0630 GMT in his news conference.
As for what to expect, no change:
- to maintain a -0.1% target for short-term rates
- and a 0% cap for the 10-year bond yield
Both of these policy targets are set under the BOJ yield curve control (YCC) policy.
Apart from this, markets will keep an eye out for any change to the Bank's outlook for prices. The BOJ goal is sustainable, stable inflation around 2%. Kuroda has said time and again he believes the current high (for Japan) CPI is only transitory, it'll fall from the middle of the next fiscal year (which beings in April) as cost-push pressures decline. Kuroda wants inflation 'pulled' up from rising wages but is not confident this will happen.
