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MNI INSIGHT: BOJ May Add Timeline To Its Forward Guidance

MNI (London)
--BOJ Could Use June Meet To Mirror Fed And Add Lower For Longer-style Wording
By Hiroshi Inoue
     TOKYO (MNI) - Following Wednesday's Federal Reserve Policy decision to
boost its bond buying and keep rates lower for longer, the Bank of Japan
considering tailoring its communication with financial markets look to nip any
sustained yen rise in the bud, MNI understands.
     So far, the yen has been relatively stable in the wake of the FOMC meeting,
although hovering close to recent highs against the dollar, so the BOJ will
likely be able to steer away from guidance on policy rate levels, but may look
to add to guidance on the timetable as to how long rates will remain at current
or lower levels, as it wants to dispel any view that it is less accommodative
than the Fed
     BOJ officials are always sensitive to Fed policy decisions, more so perhaps
than moves by the European Central Bank, and the impact on financial markets,
particularly forex rates, as a strong yen rise would be a barrier to Japan's
recovery.
     Current forward guidance says the BOJ will "closely monitor the impact of
Covid-19 and will not hesitate to take additional easing measures if necessary,
and also it expects short- and long-term policy interest rates to remain at
their present or lower levels."
     The central bank is no looking at whether it needs to refer directly to a
timetable on long the BOJ maintains the current low interest rates, either
directly in the policy statement or verbally by Governor Haruhiko Kuroda in the
following press conference.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: MMJBJ$,M$A$$$,M$J$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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