BOJ leaves its monetary policy unchanged, as widely expected

Bank of Japan monetary policy announcement.

• short-term interest target remains -0.1%
• 10 year JGB target remains around 0%
• Repeats April market ops guidance to offer to buy 10-year JGBs at 0.25% every business day unless it is highly likely no bids will be submitted
• Keeps guidance on policy bias, says to take more easing steps without hesitation as needed with eye on pandemic's impact on economy
• Keeps forward guidance on interest rates, says expects short- and long-term policy rates to remain at 'present or lower' levels

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Core CPI median forecast for fiscal 2022 at +2.3% vs +1.9% in April

• For fiscal 2023 at +1.4% vs +1.1% in April
• For fiscal 2024 at +1.3% vs +1.1% in April

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From the BOJ quarterly report:

• Japan's economy likely to recover as impact of pandemic, supply constraints subsides
• Must be vigilant to financial, currency market moves and their impact on japan's economy, prices
• Risks to price outlook skewed to upside for time being, roughly balanced thereafter
• Uncertainty regarding japan's economy is very high
• Japan's economy picking up as impact of pandemic subsides
• Inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term expectations are rising
• Exports rising as a trend but being affected by supply constraints
• Output is under strong downward pressure
• Consumption likely to continue increasing even as household real income comes under pressure from rising prices
• Corporate profits to remain high as a whole thanks in part to weak yen
• Exports, output likely to continue rising moderately as supply constraint eases
• Consumer inflation likely to gradually accelerate pace of increase as output gap improves, wages and medium- to long-term inflation expectations heighten
• Japan's output gap likely to turn positive around latter half of fiscal 2022

More from the quarterly report - these should give some encouragement to analysts looking for a change from the BOJ at coming meetings. Noting inflation expectations are rising.

• Wage pressure likely to gradually strengthen as job market tightens
• Medium-, long-term inflation expectations heightening moderately albeit at a slower pace than for short-term expectations
• Underlying rise in inflation likely to push up inflation expectations, lead to sustained rise in price growth
• Inflation likely to gradually accelerate toward BOJ's price target, though it will take time

The next policy statements are due from the BOJ on

• September 22
• October 28
• December 20

I wonder if we can see a change by the end of the year? The first thing likely to go is the 0.25% ceiling on 10 year JGBs.

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Coming up later is Bank of Japan Governor Kuroda's press conference, at 0600 GMT.