Core Inflation Pressures Expected To Cool, Uncertainty On Growth Outlook Remains High

The BoJ delivered no changes to its major policy parameters, as widely expected. The policy balance rate kept at -0.1%, the 10yr yield target at around 0% (with the widths unchanged at -0.50/+0.50%). The YCC decision was unanimous.

• The central bank will patiently keep easing until price goal is met, and won't hesitate to add to easing if needed.
• Inflation expectations have been more or less unchanged the central bank noted, with y/y CPI momentum slower compared to a while ago. Recent CPI pressures owing to pass through effects. The BOJ also expects core CPI to slow by the middle of this fiscal year.
• On growth, the central bank sounded somewhat cautious, stating output and exports were moving sideways, while capex and consumption are increasing modestly. Uncertainty around the outlook remains very high.
• The central bank also needs to pay attention to FX market developments and broader financial market developments. The FX related comments fit with official jawboning in recent sessions.
• the focus is now likely to shift to Ueda's press conference later, scheduled for 06:30GMT (07:30 BST)