Japan: Ueda pushes back timeline for policy adjustment
The Bank of Japan (BoJ) left monetary policy unchanged at its first meeting under Governor Kazuo Ueda. Lower global yields and the BoJ’s recent measures to kerb short-selling have reduced pressure on the 10-year JGB, giving Ueda breathing room to review easing measures.
What you will learn:
- The median CPI (excluding fresh food and energy) forecast for FY2024 and FY2025 in the Quarterly Outlook Report remained short of the 2% target at 1.7% and 1.8%, respectively. The risk assessment of the inflation forecast for FY2025 is now skewed to the downside.
- Ueda stressed that the review is not intended to justify any specific policy changes and the bank will take necessary steps at each policy meeting even before the review is concluded. However, we believe it is more likely that the status-quo will continue in the coming quarters.
- Although the side-effects of YCC policy still remain, the BoJ will not tweak the YCC framework as long as pressures on the yield remain contained. Together with a projected decline in global yields, the withdrawal of speculation for early policy adjustment will lessen the pressure.
Tags:
Related posts
Post
Japan’s politics add uncertainty to BoJ policy outlook
The Bank of Japan (BoJ) kept its policy rate at 0.5% at its October meeting, after a 7-2 majority vote. Two board members again voted for a rate increase. We believe the BoJ will hike in December to 0.75% as incoming data confirm that the economy is performing in line with the bank's forecasts in its quarterly outlook. However, there's a material chance of a delay.
Find Out More
Post
Japan’s December rate hike appears likely, though there is a risk of delay
We've brought forward the timing of the next Bank of Japan (BoJ) 25bps rate hike to December from next year and have added another 25bps hike in mid-2026. This reflects the surprisingly hawkish shift in the BoJ's view since its September policy meeting and upward revisions to our growth and inflation projections, driven by the US economy's resilience.
Find Out More
Post
BoJ announces cautious plan to sell ETF and J-REIT holdings
At its monetary policy meeting on Friday, the Bank of Japan (BoJ) unexpectedly announced it would start to sell its ETF and Japanese real estate investment trust (J-REIT) holdings. We think the impact of this plan on financial markets will likely be limited because the BoJ is opting to play it safe in terms of the process and the scale.
Find Out More
