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Apr 04 - 06:55 PM

MUFG: BoJ April Meeting and Wage Data to Shape Policy Outlook

By eFXdata  —  Apr 04 - 04:00 PM


The upcoming Bank of Japan (BoJ) meeting on April 26th, following its significant policy shift in March, is drawing significant attention. With the BoJ set to update its GDP and inflation forecasts, market participants are keen to assess the central bank's confidence in achieving its price stability goal. Ahead of the meeting, the release of the third estimate from Rengo on 'Shunto' wage negotiations is anticipated to show a wage increase agreement of over 5.00%, reflecting a substantial uptick from the previous year's figure of 3.76%.

Key Points:

  • BoJ Meeting Anticipation: The market is closely watching the April 26th BoJ meeting, particularly for updates on GDP and inflation forecasts, following the pivotal policy adjustment in March.

  • Wage Data in Focus: The third estimate of 'Shunto' wage negotiations by Rengo is expected to reveal a significant wage increase, with the second estimate already showing a 5.25% hike. This data is pivotal for assessing inflation expectations and the potential for further BoJ rate hikes.

  • Potential for Additional Rate Hikes: The expected strong wage growth figures are likely to influence the BoJ's updated inflation forecasts, potentially underscoring the central bank's commitment to additional rate hikes to achieve price stability.

  • Governor Ueda's Communication: Given the anticipated updates in economic forecasts, Governor Ueda may use the opportunity to more explicitly communicate the likelihood of further rate adjustments in response to wage data and inflation expectations.


The upcoming BoJ meeting, coupled with crucial wage data, is set to provide critical insights into Japan's economic outlook and the central bank's policy trajectory. With wage growth figures expected to exceed 5%, indicating heightened inflation expectations, the BoJ's forthcoming economic forecasts and Governor Ueda's comments will be closely scrutinized for indications of additional rate hikes. This period marks a crucial juncture for Japan's monetary policy direction, with significant implications for financial markets and the broader economy.

MUFG Research/Market Commentary


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