Kyodo, citing sources familiar with the BOJ's thinking, said the Bank of Japan is considering boosting inflation forecasts. A similar report was in Nikkei last week and led to some yen strength to start the year.
The latest report said the 2022 core inflation outlook would rise to 3% from 2.9% and -- more importantly -- the 2024 forecast would be 'close' to its 2% target from 1.6%.
A 2% forecast for 2024 would be the prerequisite for the BOJ normalizing policy. The BOJ meets Jan 17-18 with the changes to come after the meeting.
Despite the potential hawkish shift, USD/JPY has been rising since Tuesday and today topped the late-December high as the pair now bites into the gap lower from when the BOJ surprised by altering its yield-curve control framework.
