Bank of Japan Policy Meeting Preview – Don’t Hold Your Breath for a Hike

A brief summary of a long piece from Reuters on what to expect from the BoJ this week.

• BOJ meeting concludes Thursday; rates expected to stay unchanged at 0.25%
• Weekend election loss complicates BOJ’s normalization path
• USD/JPY hit 3-month highs near 153.50 as markets bet on delayed hikes

More:

• BOJ’s in no rush with inflation stable around 2%
• Quarterly outlook report unlikely to show major forecast changes
• Political uncertainty after ruling coalition’s defeat adds new wrinkle
• Most economists now see no hike until 2025 Q1

The wild card? Ueda’s tone at the press conference (3:30pm Tokyo/0630 GMT Thursday). Watch for:

• Any shift from September’s dovish “we can afford to wait” stance
• Fresh warnings about yen weakness (dollar/yen’s been on a tear)
• Hints about wage growth expectations for 2025

Bottom line:

• The path to BOJ’s “neutral” 1% rate target looks bumpier after the election. Ishiba’s weakened position means he’ll need support from parties favoring ultra-loose policy. That’s not great news for yen bulls.

Next BOJ meetings:

• Dec 18-19 and Jan 23-24, but March 2025 looking more likely for the next move.

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USD/JPY update:

This article was written by Eamonn Sheridan at www.forexlive.com.