BoJ offered no fireworks today – BBH

Analysts at BBH points out that the Bank of Japan's decision to keep policy steady was decided by a 7-2 majority and the two dissenters will be replaced by officials who are more sympathetic to Kuroda when their terms expire in July. 

Key Quotes

“The BOJ upgraded its assessment of the economy, suggesting a moderate expansion is underway, helped by exports which are in a recovery trend.  It left its JGB purchases at JPY80 trillion, even though in the last 12 months, it has purchased a net JPY74 bln.”

“The BOJ lifted its GDP forecast for the fiscal year to 1.6% from 1.5% and for FY18 to 1.3% from 1.1%.  It introduced an FY19 forecast of 0.7%, due to anticipated retail sales tax increase and the larger capex cycle.  The BOJ still seems (unreasonably) optimistic on inflation.  It lowered its 1.5% forecast to 1.4% this year. It left the FY18 forecast unchanged at 1.7%.  The initial forecast for FY19 is 1.9%.”