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The red-haired son-in-law, the BOJ, will release its latest policy statement on Friday.


The Bank of Japan’s monetary policy meeting will take place on Thursday June 16 and Friday June 17.

An overview via Scotia, this in a nutshell:

  • No policy changes are expected in communications this week through Friday, but there could be downside revisions to growth and upside revisions to inflation in the shorter term.

Recall:

  • In April, the Bank of Japan implemented a policy of unlimited purchases of 10-year bonds at a rate of 0.25% in daily operations as needed. The 10-year yield had breached the upper bound of the 0% + 20 basis point range as the note was sold earlier this year. The yield has moved sideways at just under 25 basis points since April and the BoJ’s credible threat can boast of success.

Scotia add comments on the yen:

  • On the yen, however, the challenge to the BoJ is a little different. The currency has moved from 115 to the greenback in early April towards the range of 134 now. This time, the BoJ is likely to continue to look through this market pressure and stick to its policy despite the political pressures. The main driver is relative central bank divergence as the Federal Reserve tightens on inflation concerns while the BoJ remains steadfast. Governor Kuroda recently remarked that “Japan is absolutely not in a situation that warrants monetary tightening, as the economy is still recovering from the impact of the pandemic.”

USD/JPY has risen to 135 (a 22-year high) since Scotia issued its note on the 10th:


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