BOJ Review - Jan 2021: Placeholder

• The BOJ's January monetary policy meeting proved to be a placeholder, matching expectations, with the Bank leaving its headline monetary policy settings and forward guidance as they were, while the tweaks to the BOJ's economic projections will be inconsequential for monetary policy. The Bank continued to highlight the downside risks for the economy surrounding COVID-19.
• Kuroda's press conference provided little in the way of substance, as broader focus fell on potential details surrounding the Bank's ongoing policy review.
• Kuroda stressed that the Bank is looking to ensure the sustainability of its ultra-loose monetary policy settings, while it is also looking to mitigate any side effects stemming from its monetary policy settings, providing no shocks.
• All in all, the decision did little to reshape broader expectations, with most of the immediate focus falling on the potential for the bank to adjust its JGB purchase scheme, possibly via a widening of the permitted operational band of 10-Year JGB yields, in addition to potential adjustments surrounding the ETF & J-REIT purchase scheme.

Please use the following link to access the full review:

BOJ Review Jan 2021.pdf