BOJ: Pressure to act now has very recently lightened up – Scotiabank

The Scotiabank Research Team is out with a brief preview of what to expect from Thursday’s Bank of Japan (BOJ) monetary policy decision.

Key Quotes:

“Some of what had been building momentum toward potential policy adjustments by the Bank of Japan has abated given recent bond market movements. … The recent correction in global bond yields has carried the JGB yield up with it and brought it back within the target range. That may lessen pressure upon the BoJ to perhaps lower its negative policy balance rate (-0.1%) and try to engineer upward pressure upon longer-term yields after Governor Kuroda guided that bond yields had declined "a bit too far." 

Ahead of a planned sales tax hike next month and still very weak inflation that will be updated again toward the end of the week, the BoJ may keep stimulus thoughts in mind but the market pressure to act now has very recently lightened up somewhat.”