When is the BoJ decision and how could it affect USD/JPY?

The Bank of Japan (BoJ) is set to announce the interest rate decision and publish the monetary policy statement today and the flow of information is expected to begin between 03:00 and 03:30 GMT.

BOJ to keep policy steady

All 47 analysts surveyed by Bloomberg do not expect the BOJ to make any changes to its asset purchases and yield curve control program. The central bank will likely continue guiding the short-term interest rate at minus 0.1 percent and the 10-year bond yield around zero percent.

Focus on inflation forecasts

The BOJ will likely reiterate that inflation is seen hitting the 2 percent target in the fiscal year 2019. The Yen may run into offers if the central bank surprises markets by pushing back the timeframe for reaching its price goal.

BOJ Governor Kuroda's take on the inflation, rising US Treasury yields and its impact on BOJ's yield curve control could also move the JPY pairs. Kuroda's press conference is scheduled at 3.30 PM Japanese time.

Further, it is worth noting that this is the first meeting of Masazumi Wakatabe, who was vocal in calling for more stimulus before he joined the board, according to Bloomberg. So, the BOJ policy statement could carry a dovish tinge.

How might the Monetary Policy Statement affect USD/JPY?

The Yen may pick up a bid if the policy statement or Kuroda hint about a potential QQE exit. Also, an upward revision of inflation forecast could catch Yen bears off guard. Meanwhile, the Yen may drop across the board if the BOJ pushes back the timeframe for achieving its inflation target.

About the BoJ Interest Rate Decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.