MNI BoJ Preview - October 2021: No Changes Due, Modest Economic Forecast Tweaks Inbound

EXECUTIVE SUMMARY

• The BoJ is expected to leave the central tenants of its monetary policy unchanged come the end of its October meeting. Expect the standard dovish dissent from the usual quarters.
• There will likely be some fairly menial tweaks to the Bank's economic forecast, but they will be inconsequential for monetary policy, with inflation still muted, at best, even in the face of the price pressures that are being observed across the globe at present.
• The bulk of the market focus continues to fall on the fiscal situation in Japan, with a supplementary fiscal package set to be drawn up in the coming months (after the imminent lower house election). Elsewhere, discussions continue to do the rounds re: the future leadership of the Bank. Deputy Governor Amamiya remains the favourite to succeed current BoJ Governor Kuroda, which is logical given his experience as a driving force behind the evolution of monetary policy in Japan. His ascendancy to the very top of the Bank wouldn't result in much, if any notable policy upheaval.