Yield Curve Control won’t be tweaked

At the upcoming meeting, the Bank of Japan will revise up its inflation forecasts amid early signs of stronger wage pressures. While that could open the door for a further widening of the tolerance band, this would be a risky move when yields are already close to the current 0.5% ceiling. Indeed, we suspect that the Bank will keep policy settings unchanged for the foreseeable future.

Note: Join our Asia Drop-In on whether China is in a balance sheet recession, the July BOJ meeting and more at 09:00 BST/16:00 SGT on Thursday, 27^th July. Register here.