BoJ likely to maintain its current policy stance - Deutsche Bank

Analysts at Deutsche Bank suggest that the BoJ on Tuesday might be the most hotly anticipated given the various stories related to a possible yield curve tweaking over the last week.

Key Quotes

“Our Japan economists do expect the BoJ to maintain its current policy stance. In consideration of the side effects of its policy, the team believe that the BoJ will declare at the end of its statement that, based on its analysis in its quarterly Outlook Report, that it will maintain its easing policy for an extended period but will conduct financial market operations and asset purchasing operations to address the mounting cumulative side effects.”

“Our colleagues believe one measure to deal with such side effects will include an overhaul of its ETF purchasing operations (a shift from Nikkei 225-linked ETF to Topix-linked ETF). An increase in the JGB yield target appears unlikely at a time when it is expected to revise downward its inflation forecast.”