The Bank of Japan will discuss the direction of monetary policy and the outlook for prices at its Monetary Policy Meeting, which will be held for two days from the 17th.
Markets are putting upward pressure on interest rates against the backdrop of speculation that the Bank of Japan will make further adjustments to its monetary policy following last month's move, and the central bank's response will be the focus.
At its meeting last month, the Bank of Japan raised the upper limit of the fluctuation range of long-term interest rates to about 0.5% in order to correct the distortion of interest rate levels, which has become a side effect of monetary easing measures that cannot be ignored. There is a view that the BOJ will revise the BOJ and allow further rises in interest rates, further increasing the upward pressure on long-term interest rates.
On the other hand, the Bank of Japan has been buying a large amount of government bonds every day and has shown a stance that it will not tolerate any further rise in interest rates.
At this year's monetary policy meeting, the Bank of Japan's response will be the focus, as it is expected to discuss the impact of last month's policy revisions on financial markets and the economy as well as the direction of monetary policy.
The meeting will also discuss whether to raise the CPI forecast for fiscal 2023 and 2024 from 1.6%, which was last announced in October.
The Bank of Japan has predicted that the inflation rate for this fiscal year will be the result of soaring raw material prices and the depreciation of the yen. As the inflation spreads to other fields, the point to watch is whether the outlook for prices from the new fiscal year onwards will approach the target of 2 percent.