BOJ Preview: Operation tweaks – Nomura

Analysts at Nomura expect the BOJ to focus any tweaks on its asset purchase operations at the meeting this week (30-31 July).

Key Quotes

“Although a formal policy change is very unlikely, we now assign a higher likelihood to an announcement/implementation of “operation tweaks” next week, both for JGB and ETF purchase operations.”

“A tweak to JGB purchase operations to allow for a wider range of 10yr yields would likely generate short-term volatility of JGBs, which should strengthen JPY.”

“Under this scenario, when and where the BOJ conducts the fixed price operation after the meeting will be crucial.”