Bank of Japan likely to remain on hold on 21-22 May

The Bank of Japan (BoJ) will hold its monetary policy meeting on 21-22 May and announce its monetary policy decision on 22 May. 

The BoJ is expected to remain on hold, keeping the size of annual asset purchases unchanged at JPY 80tn. The BoJ pushed back the timeline for achieving its 2% inflation target at its 30 April meeting, and the board cut its core inflation forecast for the fourth time this year. 

The BoJ now expects to achieve its target "around the first half of FY16" (year starting April 2016). The BoJ has become less confident about the inflation outlook, indicating the potential for more policy easing in the near future. 

It is not expected to cut the interest rate applied to excess reserves in the near term - Governor Kuroda said on 12 May that the interest rate on excess reserves is aiding money supply.