Bank of Japan meet Friday. BNP is expecting the BOJ to widen YCC to +/- 100 bps (from 50)

<p>BNPP forecasts a move from the Bank of Japan (BoJ) to adjust the Yield Curve Control (YCC) range for the 10-year rate to ±1% in its 27-28 July meeting. </p><p>While the BoJ might present this decision as a measure to manage risks related to financial intermediation and not as a sign of monetary tightening, BNPP identifies other influencing factors. </p><p>
Key Points: </p><p>
1. YCC Band Adjustment: BNPP anticipates the BoJ will increase the YCC range for the 10-year rate to ±1% in its imminent meeting. </p><p>2. Boys justification: The central bank is expected to attribute this change to mitigating risks associated with financial intermediation, emphasizing that it isn't a shift towards monetary tightening, especially given the recent rise in inflation expectations. </p><p>3. Underlying Reasons: BNPP perceives the primary motivations for this decision to be the BoJ's concerns regarding further potential depreciation of the yen and evolving inflation expectations.</p><p align="left">
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This article was written by Eamonn Sheridan at www.forexlive.com.