Daiwa On Today’s BOJ Decision

Daiwa expect the central bank to "maintain the status quo for its monetary policy as data for Jun-Aug released since the last meeting confirmed recovery trends after reopening the economy, which has provided some stability for financial markets.

• In its statement, we expect the central bank will upgrade its economic assessments for overall conditions, overseas economies, exports, and production by adding the expression "picking up". Data for Jul-Aug showed a lull for momentum compared to the data for June. However, recoveries will likely continue from September provided progress toward containing the virus is sustained. As such, the BOJ can retain its economic recovery scenario for the second half of the year. The period from Jul-Sep to Oct-Dec will likely remain a key period for ascertaining the degree to which economic activity is recovering."