No changes are predicted to the current ultra-loose monetary stance by the BoJ at its event later this week, notes Economist Lee Sue Ann at UOB Group.

Key Quotes

“Even as Japan’s inflation is heading higher, it is still below 2% beyond the FY2022 spike and the driving factor is largely stemming from commodities while domestic demand remains weak and wage growth still lacklustre.”

“And add the spike in COVID-19 inflections domestically and slow reopening of borders, there is little incentive for the central bank to change course and we continue to expect the BOJ not considering policy normalisation in 2022.”