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POV: BoJ Look Set To Trim Inflation Outlook -...>

BOJ
BOJ: POV: BoJ Look Set To Trim Inflation Outlook
- The BoJ is expected to leave its MonPol parameters unch when it issues its
latest MonPol decision on Weds. Focus is set to fall on the Bank's quarterly
outlook report, and the CPI projections within. Consensus looks for the Bank to
mark down its '19 & '20 CPI expectations, currently at 1.4% & 1.5% respectively.
MNI understands that the BoJ is increasingly concerned that momentum toward
achieving its 2% price target is slowing after data released Friday showed core
CPI slowing faster than expected.
- Central View: Downgrade to both the '19 & '20 CPI estimates. BoJ offcls
maintain the overall view that momentum toward achieving the 2% price target is
maintained, as tight labor market conditions & the positive output gap continue.
- Hawkish Risk: BoJ more upbeat than consensus re: the inflation outlook, with a
focus on the longer term momentum & effects of unprecedented monetary stimulus.
- Dovish Risk: BoJ more downbeat on inflation owing to recent moderation in core
measures, potential for more focus on the spill over effects of the trade war
and/or the scheduled sales tax hike for later this year.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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