Bank of Japan statement due Tuesday – no change expected, but the BOJ does like a surprise

The BOJ policy meeting is Monday and Tuesday, the 22nd and 23rd of January. The statement will be handed down on Tuesday. As usual, there is no firmly scheduled time. Expect it sometime in the 0230 to 0330 GMT time window.

  • that’s 2130 to 2230 US Eastern time

Bank of Japan Governor Ueda seems to be quicker to get the statement out than previous Governor Kuroda, so earlier in that window is more likely.

Preview snippet comment via Scotia:

  • With the usual caution that the BoJ seems to enjoy surprising markets, there is probably little reason to expect Governor Ueda to indicate a desire toward ending negative rates or tweaking yield curve control on Tuesday.
  • Core inflation has weakened compared to the acceleration that was unfolding over 2022H2 into early 2023.
  • It may well be that the effects of prior increases in oil prices and prior yen depreciation have worked through the CPI basket as temporary effects, leaving soft underlying pressures in their wake.
  • If Ueda did not have the confidence to lift off and out of negative rates when core inflation was higher, he’s unlikely to have it now.

(not a) Live shot! (but it could be).

BoJ main policy planks are:

  • short-term interest rate target -0.1%
  • 10-year bond yield around 0%, but flexible up to 1% (in ocot the Bank made it even more flexible by saying the 1% bound is only a ‘reference’)

This article was written by Eamonn Sheridan at Source