The Bank of Japan (BoJ) will hold its second April monetary policy meeting on 30 April, at which the board will conduct the semi-annual review of GDP and inflation forecasts. The BoJ is likely to lower its FY15 (year starting in April 2015) inflation forecasts based on the recent inflation downtrend. It will also likely lower its FY15 GDP growth forecast given soft economic momentum in Q1. The expected inflation revision indicates the need for the BoJ to take action to meet its 2% inflation target. The BoJ is expected to add JPY10tn to its current annual monetary expansion and extend the timeline to achieve the inflation target by one year. On 30 April, Japan will also release March industrial production (IP) data. “We expect IP to have increased by 1.5% m/m, in line with a pick-up in exports to the US and China”, Said Standard Chartered in a report on Friday.
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