A preview of the BOJ monetary policy meeting decision announcement would not be complete without the question:
What time is the BOJ announcement today?
Here's the thing (stop me if you've heard this before .... most likely from me) ... there is no scheduled time for the meeting to conclude nor for the announcement.
- Today's is a one-day meeting ... as opposed to the normal 2-day meet
- So, while normally we get the announcement during the 0230 to 0330GMT time window, for the one-dayers its usually a little later
- Look for it towards the end of the 0230/0330 window, or even later is not unusual
What to expect:
Market expectations are erring on the side of no further action from the BOJ today (as am I), but its a close call and there are many strong arguments for why the bank will add fresh stimulus today
The current picture:
- Global slowdown (especially Asian EM and China)
- Downgrading of export and industrial production activity (though yesterday's IP data was better)
- Still slow inflation (but note, Kuroda is still insistent that it'll tick higher)
- Negative GDP growth in the 2nd quarter (April-June)
- Poor capex numbers (though, mixed data instead of consistently negative is an improvement)
None of this is particularly encouraging, but is it enough to prompt BOJ action today?
Note there is renewed agitation within the Japanese administration for more fiscal stimulus (as opposed to more monetary stimulus).
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Also today the BOJ will issue revised forecasts (in its Semi Annual Outlook Report). Errr ... when I say they'll 'revise' their forecasts ... you better read that as 'cut' inflation and growth forecasts
The cut to the inflation forecast is unlikely to be deep, it'll come down but not enough for Kuroda to be dissuaded from arguing that they are on track to hit 2% ... and that its just gonna take a little bit longer.
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What we do have a time for is Governor Kuroda's press conference. 0630GMT for that.
