BoJ likely to maintain current degree of monetary policy accommodation for foreseeable future

The Bank of Japan is set to meet tomorrow for its interest rate decision. According to a Wells Fargo research report, the central bank meeting is expected to be a quieter meeting as compared with the Fed and ECB meeting. The Japanese economic growth contracted in the first quarter, snapping a streak of eight straight quarters of growth.

Inflation, while off its recent lows, has continued to be well short of the central bank’s 2 percent target through the first half of 2018. During its April meeting, the Japanese central bank kept its interest rates stable and kept its comprehensive program of monetary policy support, but it dropped any reference to a timeline for attaining its 2 percent inflation target, although Governor Kuroda affirmed multiple times that the removal of the date was not in any way an indication of monetary policy bias, stated Wells Fargo.

“Given both the recent and historical track record for growth and inflation in Japan, we expect the BoJ to maintain its current degree of monetary policy accommodation for the foreseeable future”, added Wells Fargo.

At 21:00 GMT the FxWirePro's Hourly Strength Index of Japanese Yen was neutral at 30.2217, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 148.692. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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