The Bank of Japan is widely expected to stick with its negative interest rate this week, leaving the focus on whether it will risk complicating its stimulus message by tweaking its cap on benchmark yields.
Since taking the helm in April, Gov. Kazuo Ueda has repeatedly pushed back against the idea that a major pivot on policy is looming by emphasizing his persistent doubts about the sustainability of recent price growth in Japan.
That’s kept the BOJ as an outlier on monetary policy while major peers aggressively hiked rates to tackle hot prices. That divergence looks set to continue with both the Federal Reserve and European Central Bank expected to hike again before the BOJ delivers its decision on Friday — a move which may renew pressure on the yen.