In summary:
1. The Bank of Japan will make no changes to the current monetary policy settings (the interest rate on the excess reserves (IOER) at - 0.10% and the 10Y JGB yield target at zero% ) and will also leave the "JPY80trln" language intact to describe the pace of increase in the balances of its JGB holdings. However, the language no longer means anything as the quantity of money has already become an endogenous variable rather than a policy variable.
2. The Bank also releases the quarterly outlook report. While real GDP outlook (median of forecasts by board members) will be revised up slightly, CPI (excluding fresh food) will be revised down. However, such downward revisions to the Bank's CPI forecasts will not trigger any policy given that they are almost conventional by now.
3. As we have persistently argued, it is the way the BoJ communicates that matters more than its policies and the issue lies in its forward guidance. The BoJ bases its forward guidance on the "inflation-overshooting commitment" but it has not served well as such with the commitment not showing any policy instruments (IOER or 10Y JGB yield).
Reference: ForexLive
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