What is the BoJ Actually Looking For?

Two months ago, I did a post before the April BoJ meeting which outlined that there was no pivot coming. “There is no BoJ Pivot Coming.”

Since then, the BoJ has surprised markets with their dovishness in back to back MPMs (monetary policy meetings), with last weeks meeting being the latest rendition.

Not only was there no change in policy for the BoJ (i.e. YCC), the policy guidance was unchanged with a continued easing bias.

• "Will not hesitate to take additional easing measures if necessary."

• "It also expects short and long term policy interest rates to remain at their present or lower levels."

There was one dissent at last weeks BoJ meeting, member of the policy board Mr. Kataoka, who wanted more easing.....

The BoJ has now tripled down, and with JPY making a fresh low, the question now is how much longer can this go on and maybe more importantly what are the triggers that the Bank of Japan are watching to potentially change course?

To answer these questions I want to break this post down into three sections:

• Kuroda recent speeches.

• Are things changing?

• Did 25bps YCC die even if the BoJ didn’t say so?