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BOJ calls for unscheduled monetary policy meeting on 22 May

BOJ to hold an unscheduled monetary policy meeting this week

The meeting will take place at 0000 GMT on 22 May (this Friday). The BOJ says that the meeting is to discuss new measures to provide funds to financial institutions, following up on instructions by governor Kuroda from the 27 April meeting.

Their next policy meeting was supposed to be on 16 June but Kuroda had already hinted that they were looking to do something like this before that meeting here.
So, this is merely to follow up on that as they will introduce a funding scheme to aid the financial system and inject more liquidity. But the sudden call here isn’t going to be all too comforting and it’ll prompt questions on if there are any banks in trouble.

Bank of Japan’s Kuroda on the wires

Via Reuters

Kuroda
  • BOJ will ease without hesitation if chance that economy may lose momentum for achieving price goal heightens
  • Economy sustaining momentum for hitting BoJ’s price goal
  • BoJ must pay more attention than before to heightening risks, particular focus in on the output gap
  • If Oil prices continue to fall and clearly push down Japan’s inflation, that could impact inflation expectations
  • No preconception on what policy decision will be made in October
  • Investors risk aversion easing somewhat due to progress in US-China trade negotiations
  • BoJ can combine, enhance tools which are rate cuts increase in asset buying and acceleration of base money
  • Excessive fall in super-long yields could hurt consumer sentiment by lowering returns of pension, insurance funds
  • Our policy is stimulating economy, but increased scrutiny is needed on cost of prolonged ultra low rate environment
  • Overseas economic slowdown yet to affect Japan’s domestic demand
No hints on whether more QE is coming for October, which is what would have weakened JPY further on the current change in sentiment with China waiving some soybean tariffs.
Interesting line about scrutiny on ultra low rate environment. We are starting to see a move away from monetary policy towards fiscal policy. I think it is reasonable expect this to be the next driver in the FX markets now if conditions remain in an ultra low interest environment.