The one constant among the world’s biggest central banks – Japan’s unwavering commitment to super-charged policy easing – will be on display again on Thursday.
Governor Haruhiko Kuroda says the economy still needs support, and will pursue that even as the yen tumbles to deeper multi-decade lows, undermined by the widening interest rate divergence with the U.S. Federal Reserve.
For Japanese businesses and consumers, the commodity-driven inflation pain could get worse, with data on Friday expected to show core inflation staying above the BOJ’s target for a third month. But the BOJ may use tepid wage growth as an excuse to stay the stimulus course.
Bets on BOJ capitulation have so far proven premature and thanks to now-daily bond buying stimulus, yields are back under control. But the binge comes at a cost – half of outstanding government bonds are now in central bank hands.