The BoJ expects that over the coming months the headline rate will continue to fall as price pressure in particular from import prices should ease. The weak JPY over the past weeks might counteract this though, in particular as there is a risk that the JPY depreciation will continue if the US central bank continues to signal two further rate hikes and if future data publication from the US were to support that.

However, speculation on the market that the BoJ might take a first step to end its ultra-expansionary monetary policy in the near future is likely to continue, which might reduce the downside pressure on JPY. 

It is generally expected that the BoJ will raise its inflation projections as part of its new projections in July. It is possible that it will then implement at least an adjustment of the Yield Curve Control as part of this.