Japan: And now for the BoJ - HSBC

Frederic Neumann, Research Analyst at HSBC, suggests that the expectations are all over the place with tapering…a hold…marginal tweaks…another bazooka on the cards from the forthcoming BoJ meet.

Key Quotes 

“A sober look, however, suggests that the BoJ is at best going to tinker with its existing framework, not introduce a major overhaul. The "comprehensive assessment" will most likely conclude that (a) inflation has so far undershot because of external shocks (read "collapse in oil prices") and (b) that the BoJ's existing easing measures have been broadly successful. Officials will probably also state that they have plenty of ammunition left to lift inflation expectations.

We expect several additional easing steps, but these should amount to just "a little more of the same". Crucially, this is unlikely to include aggressive steps to steepen the yield curve further. Recent data hasn't been all too bad, reducing the urgency to deliver an even bigger monetary impulse; this week's BoJ decision is more about addressing market concerns over the sustainability and scalability of its monetary framework.”