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Analysts at TD Securities suggest that markets will be watchful for forecast changes as the BoJ reviews its forecasts at the meeting on 31 July.

Key Quotes

“As indicated by the Tankan survey, firms’ expectations of future inflation remain benign and it is likely that the BoJ lowers its inflation forecasts as a result. Sources reportedly suggest that the projection for core CPI will be cut to 1.0% from the 1.3% current forecast for this fiscal year.”

“BoJ fixed rate operation says a lot about what they are thinking. 1) They were not happy with talk about any shift in policy towards a more hawkish tilt, 2) They were not happy with the move in JGB yields and 3) at the meeting on 31 July it seems unlikely that they will shift to a less dovish stance.”

“USDJPY will likely struggle to move lower in the near term on the back of this announcement.”