BOJ's monetary policy to depend on the wage and price data

BofA Merrill Lynch notes:

If the impact from the destabilization of global financial conditions remains limited (what we consider the main scenario at this point), we expect the BOJ's monetary policy to basically depend on the wage and price data starting this summer. Considering that there are signs of wage growth even at smaller firms (business establishments with 29 employees or less, as defined in the Ministry of Health, Labor and Welfare's Monthly Labor Survey), a rise in wages and prices for services starting this summer could lead to improvement in the inflation rate.

Accordingly, we believe the most likely scenario is that the BOJ will maintain its current pace of asset purchases. There is a need to wait for the data, however, before knowing whether that will be sufficient to boost inflation to the 2% target. We believe the direction of BoJ's monetary policy will be data dependent for a while.