BoJ Preview - September 2020: That’ll Do, For Now

That'll Do, For Now

• With Japanese Chief Cabinet Secretary Suga's role as outgoing Japanese Prime Minister Abe's successor confirmed this should be a fairly straight forward Bank of Japan (BOJ) decision. Suga is the definition of a continuation candidate and has already confirmed that he will not be pulling back on the arrows fired under the Abenomics program.
• The Bank is set to deem the COVID-19 fighting measures that it has deployed to date as ample, for now, and will leave the door open to doing more, if required, re-deploying its own brand of forward guidance:
• "For the time being, the Bank will closely monitor the impact of the novel coronavirus (COVID19) and will not hesitate to take additional easing measures if necessary, and also it expects short- and long-term policy interest rates to remain at their present or lower levels."
• It should also leave its broader monetary policy settings unchanged.
• The economic assessment that the Bank provides should be a little more upbeat, given that the worst-case scenario has seemingly been averted, at least for now. However, the coming months will be the real test for the strength of the economic rebound, with particular focus set to fall on the Bank's quarterly Tankan survey.

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BOJ Preview sep 2020.pdf