MNI BoJ Preview - July 2021: Getting Greener

EXECUTIVE SUMMARY

• The Bank of Japan will leave its headline monetary policy settings and forward guidance as is when it concludes its two-day policy meeting on Friday.
• It will likely mark its GDP growth expectations for the current FY a little lower owing to the local COVID dynamic and the fact that there will be no spectators allowed at the upcoming Tokyo Olympic games. The immediate inflation forecast will likely be nudged higher owing to the movement in crude oil prices since the April estimates were published.
• It will be the Bank's disclosures surrounding a "new fund-provisioning measure, through which it provides funds to financial institutions for investment or loans that they make to address climate change issues based on their own decisions" that grabs most of the attention. This comes after the Bank revealed its intentions to outline the new arm of its policy settings at the end of its June meeting.