Investors are widely expecting the Bank of Japan to buck the global trend and keep monetary policy on hold on Friday, but a clutch of heavy-hitting investment banks is warning them to brace for a shock.
Most major central banks are coming towards the end of the historically rapid tightening cycles they unleashed in an effort to hose down inflation that erupted in the wake of Covid lockdowns, but the BoJ has largely held firm, happy to see Japan’s relatively tame inflation pick up after decades in the freezer.
In a Bloomberg survey of 50 economists this month, 42 expected the central bank to opt for no change, maintaining its seven-year policy of buying bonds to depress yields, known as yield curve control, in an effort to ensure modest inflation sticks.