The report should give us a better understanding of what the board members were thinking. In June, the BoJ decided to keep its short-term policy rate steady at 0.0%-0.1%, which was expected. But they threw a curveball by not starting to taper their bond purchases as some had anticipated. Instead, they decided to stick with the March levels and push the decision on a bond-buying reduction plan to their next meeting in July.
Even though they delayed the tapering, the BoJ did signal that they plan to cut back on bond purchases over the next 1-2 years. The BoJ also scheduled a meeting with bond market participants for July 9-10 to discuss their policy decision.
Governor Ueda mentioned in the post-meeting press conference that when they do decide to cut back on Japanese Government Bond (JGB) purchases, it will be significant and will start right after the July decision. He also hinted that a rate hike in July could be on the table, depending on the data that comes in.
Traders and analysts will be looking for signs of the bank's confidence in the economy and any hints of changes in monetary policy in response to inflation and economic activity, especially with the recent soft patch of data we've had out of Japan.
