When are the announcements from the BoJ and how could they affect USD/JPY?

The BoJ's two-day policy meeting concludes today and as usual, the announcements will fall between a potential window of 0200GMT to 0330GMT. If the policy is on hold, then the BoJ will likely make the announcements earlier within that window than later based on previous timings. There will also be the release of its latest economic outlook report at 03:00 GMT and the press conference from Bank of Japan Governor Kuroda after the announcements scheduled for 06:30 GMT. The markets are expecting a somewhat dovish announcement considering the strength of the yen and how far away the 2% inflation target remains.  

The Bank of Japan (BOJ) is expected to:

• Retain ‘QQE with yield curve control’ policy
• Keep rates unchanged - the interest rate on the excess reserves (IOER) at - 0.10% and the 10Y JGB yield target at zero percent
• Retain the "JPY80 trillion" language to describe the pace of increase in the balances of its JGB holdings
• To raise its growth forecasts on the back of strong export growth
• Acknowledge the slight improvement in the domestic demand, consumer confidence
• Revise inflation forecasts lower

How could the outcome affect USD/JPY?

Omkar Godbole, analyst and editor at FXStreetalready offered detailed analyses of the price of USD/JPY in respect to the meeting as follows:

• The 200-DMA has nicely bottomed out and is now sloping upwards the way it did before the spot began the big rally in November 2012.
• A nice rising bottom formation is in place on the weekly chart.
• The bigger picture remains bullish unless we see a sustained break below 110.00 levels. On the higher side, a break above the recent high of 114.49 would signal the rally from the April low of 108.13 has resumed.
• The spot could revisit and possibly break above 114.49 over the next week or so if the BOJ drops a dovish bomb tomorrow.
• If all goes as expected, the Dollar-Yen pair may dip to 110.93 in line with the bearish short-term technical picture.

Key notes:

• BOJ Preview: Yen to remain a sitting duck
• USD/JPY analysis: technically bearish, but BOJ in the way
• Will USD/JPY head higher after the BoJ policy decision?
• USD/JPY: a dovish outcome expected from BOJ, a bearish bias for USD/JPY?

About the BoJ interest rate decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.