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Analysts at Nomura expect the BOJ to leave its monetary policy unchanged.

Key Quotes

“In the Strengthening the Framework for Continuous Powerful Monetary Easing statement released on 31 July, the BOJ introduced forward guidance on policy rates. We think the Policy Board is highly unlikely to conclude that economic activity and prices have changed enough to justify a guidance revision.”

“The statement also says that 10yr JGB “yields may move upward and downward to some extent mainly depending on developments in economic activity and prices,” and BOJ Governor Kuroda said in his post-meeting press conference that an acceptable range for that movement would be about double the previous acceptable range of ±0.1pp. He said at the press conference that the aim of easing the range was improve JGB market function.”

“Since the most recent meeting, 10yr JGB yield movements have not hit the upper limit of the acceptable range. Thus, when Mr. Kuroda holds the regular press conference after this Monetary Policy Meeting, we will be focused on whether he views recent movements as adequate relative to the functioning of the JGB market, and whether the BOJ’s view has changed regarding the effect of yield curve control on financial intermediation, which has been a market concern.”

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