2017.04.2604:10:00UTC+00Boj Likely to Keep Monetary Policy unchanged at Thursday’s Meeting, says Danske Bank

The Bank of Japan (BoJ) is expected to keep its benchmark policy unchanged at the 2-day monetary policy meeting, scheduled to be concluded on April 27.

This means that the BoJ will maintain its QQE and YCC with a target for the 10-year Japanese government bond yield of around zero percent. This should not be a source of significant price action as this view is widely expected in the market.

Recent data have come in on the stronger end for Japan. Specifically, Japan’s Q1 Tankan, or short-term economic survey of enterprises in Japan, have presented improvements in both large manufacturing and non-manufacturing index.

Headline CPI growth regressed to 0.3 percent year-on-year y/y while core CPI, or CPI excluding fresh food, made only slight headway in positive territory to 0.2 percent y/y. The BoJ has been widely expected to further dial back their inflation less fresh food forecast from their current 1.5 percent y/y figure for 2017.

Accompanying the meeting would be the central bank’s quarterly summary of economic projection and a moderation of the central bank’s inflation expectations is expected. The cross-impact of the upcoming meeting and geopolitical risks are forces that are exerting the primary impact upon USD/JPY in the near term, reports said.