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Trader, analyst and instructor with a 6-year experience

Bank of Japan: what to expect?

Bank of Japan will announce its Japan monetary policy decision on Wednesday. The central bank is widely expected to keep its ultra-loose monetary policy unchanged this month. Most economists believe the bond-buying program will be expanded not earlier than in April when the consumption tax hike is sheduled.

These days there is some doubt on the market whether the BOJ will meet its goal to defeat deflation and generate 2% inflation by the middle of 2015. Some investors are speculating about a possible reduction of the central bank's inflation target, while the others expect the timeframe to be extended from two years to three. 

CNBC economists believe that pushing back the end-point of the time horizon by one year could be an effective measure. "This would concede that raising inflation to 2% on a sustainable basis could take three years rather than two, but that would of course still be a very substantial achievement," they say.

Investors will be carefully watching the BOJ pres conference after the policy announcement: will Mr. Ruroda sound confident enough in the Abenomics prospects? This week Mr. Kuroda will also participate in the Davos Economic Forum. The BOJ chief will take part in a session on Friday titled "The Future of Monetary Policy".

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