MNI BoJ Preview - January 2022: No Change, Even As Noise Increases

EXECUTIVE SUMMARY

• The BoJ is not expected to alter any of its monetary policy parameters come the end of its first meeting of 2022.
• Widespread expectations are for a mark higher in the Bank’s FY22 inflation projections, alongside an upgrade when it comes to the Bank’s GDP growth view covering the same period.
• A recent sources piece from Reuters has triggered a little more interest in the event/BoJ matters, suggesting that “Bank of Japan policymakers are debating how soon they can start telegraphing an eventual interest rate hike, which could come even before inflation hits the Bank's 2% target, emboldened by broadening price rises and a more hawkish Federal Reserve.”
• In sum, the potential/likely economic forecast upgrades and any communique surrounding the recent JPY dynamic shouldn’t provide anything in the way of game changing takeaways post-meeting. The recent Reuters sources piece, flagged earlier, indicates the that the BoJ has its eye on the longer-term monetary policy dynamic, but we do not expect this to have any short-term impact on policy/BoJ monetary policy decisions in early 2022.

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