BOJ likely to remain on-hold tomorrow – BBG Survey

Bloomberg published its latest survey of economists on Monday, predicting that the Bank of Japan (BOJ) will keep its monetary policy settings unadjusted when it concludes its two-day policy meeting tomorrow.

Key Findings:

“Will probably keep its policy settings unchanged

Bloomberg Economics expects the BOJ to hold its short-term rate at -0.1% and target for the 10-year Japanese government bond yield at around 0%

Likely to keep its purchases of exchange-traded funds and real estate investment trusts unchanged

Slower-than-expected progress toward its 2% goal means it may nudge down its inflation projection for fiscal 2017

It's likely to stick to its broader outlook of a gradual pickup in inflation and moderate growth.

Board member Goushi Kataoka may dissent again - he dissented at the last meeting (his first) - saying the effects of the current stimulus weren't strong enough to meet the inflation target. There's a chance he will propose additional stimulus.

Long-term Japanese yields are facing some upward pressure as the Federal Reserve starts to unwind its balance sheet. This may lead the BOJ to step up the pace of JGB buying again (after a recent lull) to keep yields in check. Its guideline of 80 trillion yen in annual purchases of JGBs is likely to stay for now.”