MNI INSIGHT: BOJ May Add Timeline To Its Forward Guidance

--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

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