Unchanged, Bond Buying Plan To Be Announced In July

The BoJ kept interest rates unchanged as widely expected, with the lower bound remaining at 0.0%, the upper bound at 0.10%. The central bank did announce it would trim JGB bond purchases, which was also what the consensus broadly expected.

• The central bank will specify reductions in its bond buying program at the July meeting though. It will outline its plans for the next 1-2 years at that meeting. In the interim bond buying will continue as per the guidelines from the March meeting.
• The central bank will also meet with various key stake holders in terms of the bond market plan, including banks and securities firms.
• Dovish board member Nakamura dissented the JGB decision, saying such a decision should have been made at the July policy meeting.
• On the rate decision, it was unanimous 9-0 outcome from the board members.
• Elsewhere the central bank noted that financial conditions have remained accommodative. It expects inflation to be around the 2% target in the latter half of the forecast period.
• Financial market developments need to be watched, particularly FX markets.
• The delay in the JGB tapering plan is the main takeaway from today's meeting, although BoJ watchers may have been looking for something more concrete to be announced today. USD/JPY has pushed higher, last near 157.85/90, while JGB futures have also gaped higher post the lunchtime break.