Bank of Japan Watch Ueda will ditch Yield Curve Control at his first meeting Governor Kazuo Ueda faces a difficult choice as inflation has risen faster than the Bank had anticipated but economic activity is much weaker than the Bank had thought. While the risks are tilted... 21st April 2023 · 10 mins read
Bank of Japan Watch Yield Curve Control could be abandoned this month Yield Curve Control is on counted time and the key question is not if but when it will be abandoned. The Bank could wait until Kazuo Ueda becomes Governor in April. But given that this risks another... 3rd March 2023 · 8 mins read
Bank of Japan Watch Counting down the clock on Yield Curve Control The widening of the Bank’s tolerance band around 10-year yields has done little to improve market functioning while the government seems to be pressing for a policy shift in response to higher... 11th January 2023 · 9 mins read
Bank of Japan Watch Policy tightening unlikely despite soaring inflation We expect the Bank of Japan to stick to its assessment that the recent surge in inflation won’t be sustained at the upcoming meeting. Accordingly, the Bank won’t respond with tighter policy. 13th December 2022 · 8 mins read
Bank of Japan Watch Case for policy tightening won’t become compelling The Bank of Japan will revise up its near-term inflation forecasts in next week’s Outlook report. But by predicting that inflation will fall below target again over the next couple of years, it will... 20th October 2022 · 8 mins read
Bank of Japan Watch Bank will stay the course The Bank of Japan is coming under renewed pressure to lift interest rates or abandon Yield Curve Control as inflation and long-term bond yields surge. But the Bank will probably stick to its view that... 15th September 2022 · 8 mins read
Bank of Japan Watch Bank has breathing room to reconsider tolerance band The Bank of Japan will signal prolonged loose policy by forecasting below-target inflation over the next couple of years in next week’s “Outlook” report. Meanwhile, the fall in global bond yields in... 14th July 2022 · 8 mins read
Bank of Japan Watch Weak wage growth to preclude tighter policy While Japanese inflation will stay just above the Bank of Japan’s 2% target over the coming months, the Bank will not tighten policy at either the short or long end of the yield curve while wage... 10th June 2022 · 8 mins read
Bank of Japan Watch Policy settings under threat but BoJ won’t yield Despite coming under significant pressure in both bond and currency markets in recent weeks, the Bank of Japan will not respond to inflation reaching its 2% target by hiking its short-term policy rate... 21st April 2022 · 8 mins read
Bank of Japan Watch 2% inflation wouldn’t be enough for rate hike While the war in Ukraine will lift Japanese inflation to the Bank of Japan’s 2% target, continued weakness in wage pressures and underlying inflation mean that the Bank won’t respond with a rate hike... 10th March 2022 · 8 mins read
Bank of Japan Watch Shrinking balance sheet won’t lead to tighter policy While Omicron is likely to intensify input price pressures, most Japanese firms will continue to absorb those costs in their margins, ensuring inflation stays well below the Bank’s 2% target. And in... 12th January 2022 · 8 mins read
Bank of Japan Watch BoJ to extend Covid aid, won’t lose control of yields While renewed virus restrictions are unlikely to be deflationary, we think Omicron fears will prompt the Bank of Japan to err on the side of caution and extend its emergency corporate funding measures... 9th December 2021 · 8 mins read
Bank of Japan Watch Bank to look through weaker yen and supply shortages Sitting comfortably with continuity candidate PM Kishida in charge, the Bank of Japan won’t alter its major policy settings at its October meeting. And we doubt the Bank will respond with policy... 21st October 2021 · 8 mins read
Bank of Japan Watch PM frontrunner Kono may favour sharper taper Dug in for an extended hold, the Bank of Japan won’t alter its major policy settings at its September meeting. Further ahead though, PM Suga’s successor – to be elected in two weeks’ time – may look... 16th September 2021 · 8 mins read
Bank of Japan Watch New climate change facility not a game changer At its July meeting we expect the Bank of Japan to outline that it will offer interest-free loans to banks under its new fund-provisioning measures aimed at addressing climate change. Beyond that... 9th July 2021 · 8 mins read
Bank of Japan Watch Asset purchases to remain low but rates on hold At its June meeting we think the Bank of Japan may extend the deadline on its emergency lending facility from September to December. Beyond that point, it should further taper its purchases of short... 11th June 2021 · 8 mins read
