
When will the Bank of Japan shift its monetary stance to reflect the reality of increasingly sticky inflation? Predicting policy remains difficult but the central bank’s interpretation of economic change remains as significant as the data itself.
Recent wage and inflation data already justify some scaling back of the current super-accommodative monetary stance. The BoJ will probably revise its inflation forecasts upwards in its outlook report due on July 28, indicating that it expects inflation will remain higher than initially thought.
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