The following are brief expectations for the BoJ April meeting statement as compiled from the related research reports of 6 major banks. Overall, they see the BoJ meeting as a non-event with muted FX reaction.
Credit Agricole Research: The BoJ meeting and quarterly outlook report should have a limited impact on FX markets.The BoJ should leave all of its policy pararemeters unchanged. There is some risk that the BoJ could change or even drop the language in the statement that references its JPY80trn target for monetary base expansion and JGB purchases.
Barclays Research: We and the market expect the BoJ to keep its policy stance intact. In its quarterly Outlook Report, the BoJ is likely to leave its real GDP growth forecasts largely unchanged while lowering its core CPI projections, especially for FY17.
BofA Merrill Research: BofAML notes that the BoJ widely expected to leave its policy unchanged, and the FX market is likely to focus on external issues. BofAML still holds the view that selling JPY is a better risk-reward trade especially vs the EUR.
Nomura Research: Nomura expects the BoJ to leave its policy unchanged this week, and to keep its cautious stance unchanged, as geopolitical risks still exist. On the JPY front, Nomura believes JPY’s reaction to no policy change would be muted as market expectations for any change are low.
Deutsche Bank Research: We think the BoJ will be careful to avoid language that would prompt speculation on it rolling back monetary easing. We do not expect BoJ policy to drive a rise in the USD/JPY, but expect it to continue offering support.
Morgan Stanley Research: MS Research sees no change from the BoJ and argues that the conditions for a resumption of the USD/JPY rally are in place.
