BOJ Monetary Policy Navigator

BoJ seen forgoing July rate hike to ensure trouble-free start to QT

• We project BoJ will forgo rate hike when it releases “detailed plan” for reducing its bond purchases at July 30-31 Policy Board meeting
• We agree with market consensus that Bank will take monthly purchases down to JPY2-3 trillion over next two years
• BoJ may reaffirm April Outlook Report scenario, with Governor Ueda hinting at possible rate hike in near future