BoJ seen leaving policy on hold at January meeting; focus on core-core CPI outlook
Key points
- We expect Policy Board will leave monetary policy on hold when it meets on January 22-23 and project NIRP will be wound down at April meeting
- We see Bank lowering real GDP growth forecast for FY23 in January Outlook Report while reiterating its view that economy will grow above potential
- If BoJ does not lower its core-core CPI projections, we expect it will continue looking for evidence that "virtuous cycle of wages and prices" has been achieved
