Bank of Japan Is Expected to Stand Pat Next Week

Forex News

The Japanese central bank will hold its policy meeting next week. Bank of Japan is not expected to change policy rates on its meeting on September 19. The BoJ is forecast to maintain its short-term interest rate target at minus 0.1 percent and a pledge to guide long-term rates around zero percent. It is also likely to reiterate a pledge, adopted in July, to keep rates very low for an extended period so a steady economic recovery helps to push up inflation to its elusive 2% target.

Earlier this month, the BoJ governor Haruhiko Kuroda dismissed speculation that the central bank was planning to adjust its super-loose policy, aimed at keeping long-term interest rates around zero percent and short-term rates at -0.1 percent.

According to analysts, Japan’s central bank would discuss the potential economic fallout from the intensifying trade spat between the United States and China. Japan's economic growth is expected to slow in the July-September quarter due to a string of natural disasters this summer, as well as escalation of the US-China trade war.

Still, this week’s data showed, that real gross domestic product (GDP) grew by its fastest clip in nine quarters in the second quarter, an annualized 3%. But real GDP is likely to increase just 0.1% in July-September, or an annualized 0.5%, according to the average projection of economists.