The Bank of Japan (BoJ) will hold its Monetary Policy Committee (MPC) meeting on Friday, September 22 and as we get closer to the Interest Rate Decision, here are the expectations forecast by the economists and researchers of eight major banks.
No change is expected, especially after reports emerged last week that BoJ policymakers were concerned with how markets took Governor Ueda’s recent comments.
ANZ
We don’t expect the BoJ to change policy at its upcoming meeting, but there is a good chance it drops its guidance that it won’t hesitate to take additional easing measures. Our inflation outlook suggests that the BoJ won’t be dropping its negative rate policy for the foreseeable future despite Ueda’s claim there is a non-zero chance of it happening by year’s end.
Standard Chartered
We expect the BoJ to keep its policy balance rate unchanged at - 0.1% and the 10Y yield target at 0.0%. We think stickier-than-expected inflation may make the central bank hawkish. BoJ Governor Kazuo Ueda has discussed the possibility of lifting negative interest rates as part of the central bank’s strategy to address ongoing inflation and wage increases. However, he clarified that this decision is not imminent but could be considered in the future.
Deutsche Bank
We expect the BoJ to stick to its current policy stance but revise the MPM statement to point to policy normalisation. Further out, we see the YCC and negative interest rate policy ending at the October and January meetings, respectively.
Danske Bank
We expect no changes in monetary policy by the BoJ. We do however expect another tweak to YCC later this year.
ING
The BoJ is likely to stay pat. The central bank could however probably send a subtle hawkish message to the market after higher-than-expected inflation and a weak JPY, combined with rising global oil prices, pushed inflation up further.
TDS
We expect BoJ to leave all policy levers unchanged and doubt the BoJ is eager to spring another curveball at markets after July's surprise YCC tweak. Instead, a lot of focus will be on Ueda's comments on the Yen as he may be under pressure to lean against JPY weakness in his remarks after USD/JPY continues to drift towards 150 despite verbal interventions from MoF officials.
SocGen
We expect the BoJ to pursue its main monetary policy, i.e. YCC and ETF purchases, but it may reiterate the somewhat hawkish message from Governor Ueda, which, in our view, was aimed mostly at containing the mounting depreciation pressure on the Yen.
Wells Fargo
We believe the BoJ will ultimately choose to keep the current policy rate of -0.10% in place, and we also believe the BoJ will opt to not make any further adjustments to its YCC policy. Our rationale stems from a seemingly unsustainable source of Japan's inflation as well as recent comments that suggest policymakers still prefer to keep monetary policy accommodative. Global bond yields are close to topping out and should eventually move lower next year as central banks flip to easing. As the Fed approaches rate cuts and US yields fall, bond yield differentials between JGBs and Treasuries should narrow, ultimately supporting the Yen over the course of 2024. JPY is very sensitive to yield differentials, and as yields narrow, the Yen can be the key outperformer in the G10.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0500 amid French political jitters
EUR/USD is back in the red below 1.0500 in the European session on Wednesday. The pair trades with caution amid renewed US Dollar buying and French political uncertainty as the government faces a no-confidence vote in a busy day ahead. US data, Lagarde and Powell eyed.
GBP/USD clings to gains below 1.2700 ahead of Bailey's speech
GBP/USD is consolidating gains below 1.2700 in early European trading on Wednesday. Traders refrain from placing fresh bets ahead of speeches from BoE Governor Bailey and Fed Chair Powell later in the day. US ADP Jobs and ISM Services PMI data are also awaited.
Gold price slides below $2,640, fresh daily low ahead of Fed Chair Powell's speech
Gold price attracts some sellers following an intraday uptick to the $2,650 supply zone and hits a fresh daily low during the first half of the European session on Wednesday. The precious metal, however, remains confined in a familiar range held over the past week or so as traders seem reluctant to place aggressive directional bets ahead of Fed Chair Jerome Powell's speech.
ADP report expected to show US private sector job growth cooled in November
The ADP Employment Change report is seen showing a deceleration of job creation in the US private sector in November. The ADP report could anticipate the more relevant Nonfarm Payrolls report on Friday.
The fall of Barnier’s government would be bad news for the French economy
This French political stand-off is just one more negative for the euro. With the eurozone economy facing the threat of tariffs in 2025 and the region lacking any prospect of cohesive fiscal support, the potential fall of the French government merely adds to views that the ECB will have to do the heavy lifting in 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.