BOJ says strong chance CPI will moderate, but not to back below 2% by mid fiscal year

<p>The Bank of Japan monetary policy meeting in June outcome is here:</p><ul><li><a href="https://www.forexlive.com/centralbank/boj-announces-no-change-to-jgb-yield-curve-control-tolerance-band-as-widely-expected-20230616/" target="_blank" rel="follow">BOJ announces no change to JGB Yield Curve Control tolerance band, as widely expected</a></li></ul><p>In brief from today's 'summary'"</p><ul><li>
Appropriate to maintain current monetary easing</li><li>Wage growth needed,
not just cost-push inflation, to sustainably, stably hit price target</li><li>Premature to shift
policy as smaller firms becoming keen to hike wages, invest more</li><li>BOJ must maintain
easy policy with eye on side-effects, as long-term risk to prices
skewed to downside</li><li>BOJ must keep easy
policy but must be mindful of chance it is under-estimating
sustainability of Japan's price rises</li><li>No need to make
operational tweaks to YCC as distortion in shape of yield curve has
been resolved</li><li>BOJ must consider
reviewing YCC at an early stage, even as it maintains easy monetary
policy</li></ul><ul><li>
Bond market function improved but still remains at low level</li><li>There is uncertainty
on whether inflation, after slowing toward middle of current fiscal
year, will bounce back</li><li>Rise in Japan's
inflation increasingly driven by domestic factors</li></ul><ul><li>
Inflationary pressure likely to remain strong for time being</li></ul><ul><li>
There is strong chance consumer inflation will moderate, but won't
slow back below 2%, toward middle of current fiscal year</li></ul><p>

Wow that last point seems very significant! The BOJ has been arguing, over and over it expects CPI to drop from around September/October, but if not below target then surely policy much be adjusted (tightened?) </p><p>Full text is here:</p><ul><li><a href="https://www.boj.or.jp/en/mopo/mpmsche_minu/opinion_2023/opi230616.pdf" target="_blank" rel="nofollow">Summary of Opinions</a> at the Monetary Policy Meeting on June 15 and 16, 2023</li></ul>

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