Technical Analysis

BOJ policy statement due on Friday, 28 October 2022 – preview

The Bank of Japan statement is expected between 0230 and 0330 GMT on Friday, 28 October 2022.

There is no set time for the release but during that window is a good bet based on past experience.

The statement will be accompanied by new forecasts from the Bank, the Outlook Report.

Bank of Japan Governor Kuroda will speak at his news conference at 0630 GMT, following the statement.

What to expect?

No change to policy is expected from the BOJ tomorrow. The two main policy planks are:

  • the minus 0.1% target for short-term interest rates
  • the target for the 10-year bond yield at around 0%

In forward guidance, there could be a hint at some sort of change to come given the Bank of Japan is under pressure from government and business to help combat the very weak yen. Such a tweak would be minor, the BoJ can (and do) argue that currency policy is up to the Ministry of Finance. Given the Federal Reserve is hell-bent on further rate hikes ahead its doubtful anyway that some sort of minor concession from the BOJ would have much impact on USD/JPY.

In the Outlook Report:

  • the BOJ is expected to slightly revise up its consumer inflation forecasts for the year ending in March 2023 and 2024
  • the forecasts are expected to still show core consumer inflation sliding below the BOJ’s 2% target next fiscal year
  • cuts to GDP growth forecasts for the current and following fiscal years are also expected

At Kuroda’s press conference the Governor is likely to give a nod to the weak yen concerns, repeating comments that a rapid drop in the JPY is a negative for the economy and that he, along with MoF officials, will keep be watching closely its moves and impact.

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