Bank of Japan is set to hold fire

Next week, the Bank of Japan will most probably hold off on expanding stimulus notwithstanding an expected downgrade in its price prediction that might demonstrate that Governor Haruhiko Kuroda won't see inflation reaching its 2% objective before his tenure ends in 2018.

With policy on hold, the nine-member board might also discuss some operational details of its new policy adopted the previous month, such as to what extent Japan’s major bank could slow its bond purchases if yields drop below target.

In a quarterly estimation of its forecasts due at the rate gathering, Japan’s major financial institution is going to diminish next fiscal year's inflation forecast moderately, thus reflecting weak consumption as well as dropping import costs from a strong yen.

The review might also extend the timeframe for dropping its ambitious inflation objective beyond Kuroda's five-year term, coming to its end in April 2018. Currently, the BOJ projects inflation to hit 2% during the fiscal year ending in March 2018.

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