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BoJ meeting: what to expect?

The Bank of Japan will announce its policy meeting decision on Friday. The regulator is widely expected to refrain from adding stimulus this month. All 33 economists surveyed by Bloomberg forecast the central bank to keep policy unchanged with 60-70 trillion yen QE per year. 9% of the economists expect additional monetary stimulus in July, down from 38% in the previous survey.

Japanese inflation data and the Q1 growth numbers persuaded the investors that the economic recovery remains on track without additional stimulus. Societe Generale analysts go even further, pointing that on the previous meeting on April 30 the Bank revised growth forecasts down without any hints on stimulus to come.

The Bank of Japan may slightly raise its outlook for the overseas economies due to receding geopolitical risks from Ukraine, rises in China's May exports and a surge in U.S. imports. This could signal that the bank remains confident that sluggish exports will pick up and help Japan's economy achieve a sustained recovery.


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