How will the Bank of Japan react to cheaper oil?

The Bank of Japan will probably lower its inflation forecasts and push back the timing for reaching its 2% target yet again later this month. With cheaper energy keeping a lid on inflation, the recent slide in expectations of future price gains may continue. If this results in sluggish pay hikes in the upcoming spring wage negotiations as we expect, there is a good chance that the Bank will step up the pace of easing in coming months, perhaps in April.