Alongside the Bank of Japan March monetary policy meeting statement will be the outcome of the Bank's long-awaited review of policy.
Market speculation has centred on two potential changes to policy:
1. Allowing the yield target on 10yr JGBs to swing more widely around 0%. The current tolerated range is 0.2%. Countering this expectation of a wider band are recent comments from Governor Kuroda that he does not see a need for a wider band.
2. The BOJ may drop its 6tln yen ETF yearly buy target. The Bank would not want to spook markets so if this is dropped its likely the 12 tln yen upper limit to the buy target would be kept and reiterated.
Other potential changes from the Bank include:
- sending a signal that further rate cuts are still very much an option - watch for comments that financial stability risks can be managed to indicate this
- the Bank may increase incentives for lending to the real economy - perhaps by lowering/changing reserve requirements
The BOJ announcement is expected some time in the 0230 to 0330 GMT time window on Friday, although that later time may get stretched due to extra debate at the Bank. Bank of Japan Governor Kuroda will then hold a press conference at the normal 0630 GMT.
