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Researchers at UOB Group in its latest Quarterly Global Outlook suggested the BoJ should keep its monetary status quo intact for the foreseeable future.

Key Quotes

“We believe as long as the Japanese government stays on course to implement the next sales tax hike in Oct (which can be taken as a sign it is keeping its pledge to fiscal discipline and restore fiscal balance at some point), that may be sufficient to convince the BOJ to use this as an opportunity to reassert its easy monetary policy position without changing the policy targets, i.e. “allow” the Finance Ministry to issue more debt (JGBs) which the BOJ in turn will buy so as to push its JGB buying closer to the JPY80trn annual pace”.