MNI BoJ Review - October 2021: No Shocks, Steady Policy, Forecast Tweaks, Move On

EXECUTIVE SUMMARY

• There were no surprises within the latest BoJ decision; policy settings and forward guidance were unchanged, with the standard dovish dissent from Kataoka present. CPI projections for the current FY were marked lower, with the same holding true for the Bank's GDP projection (the next FY is expected to see a slightly faster clip of GDP growth as a result). The language deployed surrounding the economy was matter of fact, with downside risks to both the economy and inflation underscored.
• Governor Kuroda did not push back against the recent JPY weakness, pointing to a move that is aligned with fundamentals, while noting that the recent depreciation is not a bad thing (no surprise given the well documented inflationary struggles the BoJ has faced).
• Focus now moves to the lifespan of the BoJ's special fund measures to facilitate corporate financing, currently set to expire at the end of March.

Click to view the full review:MNI BoJ Review - Oct 2021.pdf