Policy on hold for now as euro-zone crisis pauses

The Bank of Japan’s Policy Board will conclude its two-day June meeting this Friday (15th). We expect this to be uneventful for three reasons. First, the weekend’s bailout of Spain’s banks has reduced the chances of an imminent collapse in the euro. Second, the ECB and the Bank of England left policy unchanged at recent meetings despite their greater direct exposure to the crisis in Europe. And third, recent data out of Japan have been mixed but broadly indicative of a pick up in the coming quarters.