BoJ views on increasingly unstable JGB market: Preview of January MPM
Key points
- We expect BoJ will leave policy rate on hold at 0.75% as it scrutinizes impact of December rate hike on economic activity, prices, and financial conditions
- We anticipate upward revisions to Bank's GDP growth forecasts for FY25 and FY26 and will be watching hawkish Board members' core CPI outlook for FY26
- We will also be monitoring BoJ's views on increasingly unstable JGB market; will it invoke "emergency clause" for bond purchases?