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MNI BoJ Preview - September 2024: Wait-And-See Approach For Now

At this week’s meeting, consensus is unanimous in anticipating that the BoJ will not change its 0.25% target rate.

Central Bank PreviewBoJ - PreviewHomepageCentral Bank ReportsMarkets

EXECUTIVE SUMMARY

  • The Bank of Japan (BoJ) Policy Board will meet on September 19-20, with markets closely watching for any signals regarding future monetary policy normalisation.
  • Consensus unanimously expects no change to the 0.25% target rate at this meeting.
  • Several factors suggest the BoJ may favour a wait-and-see approach for now. Uncertainty around the US economic outlook and downside risks to overseas economies persist. Additionally, Governor Ueda’s parliamentary testimony, along with speeches by Deputy Governors Uchida and Himino, have emphasised that the BoJ will not hike further while financial markets remain "unstable”.
  • Moreover, the yen’s appreciation since July has reduced inflationary pressures, diminishing the need for an immediate rate hike.
  • Another consideration for the BoJ is the upcoming LDP presidential election, which will determine the next prime minister. With the race currently unpredictable, coupled with the US election on November 5, the BoJ may opt for a cautious approach amid political uncertainties.
  • Full preview here:

    • BOJ Preview - Sep 2024.pdf


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EXECUTIVE SUMMARY

  • The Bank of Japan (BoJ) Policy Board will meet on September 19-20, with markets closely watching for any signals regarding future monetary policy normalisation.
  • Consensus unanimously expects no change to the 0.25% target rate at this meeting.
  • Several factors suggest the BoJ may favour a wait-and-see approach for now. Uncertainty around the US economic outlook and downside risks to overseas economies persist. Additionally, Governor Ueda’s parliamentary testimony, along with speeches by Deputy Governors Uchida and Himino, have emphasised that the BoJ will not hike further while financial markets remain "unstable”.
  • Moreover, the yen’s appreciation since July has reduced inflationary pressures, diminishing the need for an immediate rate hike.
  • Another consideration for the BoJ is the upcoming LDP presidential election, which will determine the next prime minister. With the race currently unpredictable, coupled with the US election on November 5, the BoJ may opt for a cautious approach amid political uncertainties.
  • Full preview here:

    • BOJ Preview - Sep 2024.pdf