BoJ Preview: Banks expect no fireworks in January

Nordea Markets

Analysts at Nordea Markets are expecting the BoJ to keep its monetary policy unchanged in January and maintain its accommodative stance.

Key Quotes

“Protectionism from the US and slowdown in China suppress corporate profits and put Japan’s growth under pressure.”

“Inflation is still far from the above 2% target. At the December meeting, the BoJ pledged to keep rates extremely low for an extended period of time. The target for the 10-year government bond yield is expected to remain at around 0% but the BoJ will most likely gradually increase the flexibility of its easing programmes.”

Westpac

According to Robert Rennie, head of FM strategy at Westpac, the BoJ will be the main event for the JPY, though no change in policy is expected.

Key Quotes

“Given this is a quarterly outlook meeting, it will be what the BoJ does with its forecasts and how it talks to both the domestic and international issues the economy faces. Increasing downside risks to inflation and growth present a challenge to the BOJ.”