The Bank of Japan is expected to announce its monetary policy decision after noon, with attention focused on its wording on whether underlying inflation has “reached” 2%. The meeting is being held over two days, and interest rates are expected to remain at current levels.
The Bank of Japan is holding its Monetary Policy Meeting over two days and is widely expected to publish a view after the meeting that underlying inflation has reached 2%. This could be the first time since the target was set in 2013 that inflation has reached 2%, with the key focus of the meeting on the wording of the Bank’s forthcoming Outlook for Economic Activity and Prices.
The policy rate is currently expected to remain unchanged at around 1.25%. Factors cited as pushing up prices include persistently high crude oil prices amid tensions in the Middle East, the sustained depreciation of the yen and increased demand related to AI. The Bank of Japan is considering an adjustment to monetary easing in light of these factors.
Depending on the wording of the Outlook report, the implications for the market could change. At the press conference, Governor Kazuo Ueda (植田和男) is expected to discuss the view that underlying inflation has reached its target and the direction of policy going forward. The press conference is scheduled to take place in the afternoon.
The decision is scheduled to be announced shortly after noon, followed by Governor Ueda’s press conference in the afternoon, with the release schedule for each time slot already published. The background to the Bank of Japan’s decision and the market reaction are expected to be reported as they develop.