**As seen in Risk In The Week report 07/23/23, subscribe at cablefxm.co.uk/reports
The Bank of Japan has kept monetary policy unchanged during the most aggressive tightening cycle seen in decades, negative rates remain in place while there has been talk of a YCC adjustment for some time. Speculation of policy adjustment led to a shrinking in the JGB-Treasury yield spread and a correction in recent JPY weakness. The desk at MUFG goes into the July meeting expecting no change in short and long-term policy rates, YCC is expected to stay unchanged, they also see the BoJ lifting its core inflation forecast into the 2% target range, price outlook revisions is something Ueda has pointed at a necessary development for the central bank to adjust policy. Also, MUFG sees the BoJ pushing back the timing of slowdown in inflation towards 2024, while they do not see a change to the subsequent scenario for prices.
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