Comments from ANZ on the Bank of Japan meeting today (for more on this meeting and the leaks we've seen, along with market pricing indications on what to expect, check out this here - Economic calendar in Asia 28 July 2023)
ANZ:
- Although Ueda pushed back on expectations of a change in its policy settings at the July BoJ monetary policy meeting, he continues to say any change to YCC must come as a surprise. So, if the BoJ were to surprise the market we think it could either: widen further the trading band around the 10y target of 0% or shorten the tenor of the YCC target to 2y JGB. We assign a higher probability to the latter.
- We maintain our view that BoJ will shorten the tenor of its YCC target to 2y from 10y in coming meetings, with a low expectation of that happening this week.
BoJ
