Flash Notes-Japan: BOJ Stays Unchanged On 30 April 2015

　　No surprise again as the Bank of Japan (BOJ) kept its monetary stance unchanged today (30 April). Thedecision was again not unanimous at 8 to 1 as the usual suspect Kiuchi voted against it as heproposed reducing the monetary target significantly to an annual pace of JPY45trn (from the currentJPY80trn) but was rejected for the second time.

　　In their April 2015 Publication of Outlook Report (The Bank’s View), the BOJ remained optimisticgrowth outlook but now expects its 2% inflation target to be achieved in the period in 1H of FY2016. TheFY2017 growth forecast was very weak due to effects of the planned 2017 consumption tax hike andanticipated cyclical deceleration. We are concerned the FY2017 inflation forecast is too high at 1.9%.

　　We continue to expect the BOJ to maintain the status quo position at least in 1H 2015. The next keydata events are the Japan 1Q 2015 prelim GDP data release on 20 May 2015 (7:50 am Singapore time)followed by the 21/22 May 2015 BOJ MPM policy decision.