The report should give us a better understanding of what the board members were thinking. In June, the BoJ decided to keep its key short-term rate between 0.0% and 0.1%, as planned. But they threw a curveball by not starting to reduce their bond purchases as some had expected. Instead, they decided to stick with March levels and postpone a decision on a plan to reduce bond purchases until their next meeting in July.
Although it has delayed tapering, the BoJ has indicated that it plans to reduce its bond purchases over the next two years. The BoJ has also scheduled a meeting with bond market participants on July 9-10 to discuss its policy decision.
Governor Ueda mentioned in the post-meeting press conference that when they decide to reduce Japanese Government Bond (JGB) purchases, it will be significant and will start right after the July decision. He also hinted that a July rate hike could be on the cards, depending on available data.
Traders and analysts will be looking for signs of bank confidence in the economy and hints of monetary policy changes in response to inflation and economic activity, particularly with the recent period of weak data from from Japan.
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