Japan: All road leads to BoJ meeting this week – Danske Bank

Research Team at Danske Bank, suggests that in Japan, all eyes will be on the Bank of Japan’s (BoJ) monetary policy announcement on 16 June.

Key Quotes

“We still think a move at the 28/29 July meeting is more likely than in June and we still expect the BoJ to cut its policy rate by 20bp to -0.3% and to announce additional qualitative measures in July, when the BoJ is due to update its CPI and GDP forecast.

Economic activity in Q1 proved to be much stronger than initially expected and GDP was actually revised even higher this week (from 0.4% q/q to 0.5% q/q for Q1). This should take some of the immediate pressure of the BoJ.

Moreover, we think it would like to hold off on additional easing until after the UK’s EU referendum on 23 June and the Upper House elections in Japan in early July. This implies that a move in July is still the most likely scenario, although the appreciation of the yen in the past few weeks has increased the likelihood of an early move in June.”