BoJ unlikely to change its ultra-loose monetary policy anytime soon - Rabobank

Analysts at Rabobank point out that the Bank of Japan kept its monetary policy stance unchanged and maintained its ultra-accommodative policy of a -0.1% policy rate and a 10-year JGB yield within a range of ± 0.2ppts around zero.

Key Quotes

“According to Björn Giesbergen, this is in line with our view that the BoJ will not change its ultra-loose monetary policy anytime soon. Recently released economic and inflation data point in the same direction.”

“The Japanese economy contracted for the second time this year in Q3, and (core) inflation is still subdued and far off the BoJ’s 2% target. Another key thing to watch for 2019 is the scheduled VAT hike for October 2019.”

“Given that the Japanese economy entered a recession back in 2014 when the previous sales tax hike took place, it seems logic to assume that the Bank will be cautious to make any move that could undermine consumer spending in advance of that event.”