MNI POLICY: BOJ Aim For Review Flexibility In Policy Statement

The Bank of Japan could refrain from commenting on a future monetary policy review in its upcoming April statement, although new Governor Kazuo Ueda, if asked about it at the following news conference, will discuss it then, MNI understands.

If policymakers mention the review in their statement, it will reduce policy flexibility and Ueda will face difficult questions, including time span of the view and whether the BOJ will act or not during the review period.

Bank officials will likely prepare for questions and answers at the news conference, despite omitting the review from the official statement, MNI learnt.

The review, when announced, is likely to focus on BOJ policy under both Governors Haruhiko Kuroda and Masaaki Shirakawa, comparing and contrasting both so as not to offer interpretations of an implicit criticism of Kuroda.

INFLATION OUTLOOK

As for the board’s inflation outlook in fiscal 2025, under current conditions, it could remain at 1.9%, as increasing it to 2.0% could invite fresh market speculation over policy tweaks.

The BOJ will release its medium-term economic growth and inflation view via the Outlook Report on Friday and the median inflation forecast will unlikely be pushed to 2%, judging from current economic and price conditions, MNI understands.