The Bank of Japan (BOJ) is likely to stress its resolve to keep monetary policy ultra-loose despite expected upward revision to inflation forecasts, Reuters reported on Friday, citing three sources familiar with the matter.

Sources further noted that the BOJ is expected to raise its fiscal 2022 inflation forecast to above 1.5% from the current 1.1% at the April meeting while downgrading the fiscal-2022 growth forecast from the current 3.8% expansion.

Market reaction

The USD/JPY pair trades at its highest level in two decades above 126.50 following this headline.