The Bank of Japan started a two-day policy meeting on Monday, with policymakers likely to keep intact the current ultraeasy monetary policy to beat deflation, while discussing the possible impact of a consumption tax hike to be introduced in April.
The nine-member Policy Board is also expected to discuss developments in overseas economies, including the effects of ongoing tension in Ukraine as well as slowing growth in emerging economies, as Japan’s exports appear to lack momentum despite the yen’s depreciation.
Some market participants speculate the central bank may further ease its monetary grip amid lingering skepticism about whether the bank can attain its 2 percent inflation target as it has promised, as the effects of the weak yen pushing up import prices are likely to wane.
But the BOJ has so far remained confident about its scenario, with Governor Haruhiko Kuroda expressing the view that the Japanese economy is on track to achieve the inflation target.
“It is important to steadily promote the current measures,” Kuroda said at an upper house budget committee earlier this month.
The central bank is likely to maintain its assessment of the domestic economy as it has been recovering moderately.