The report should give
us a better understanding of what the board members were thinking. In June, the
BoJ decided to keep its short-term policy rate steady at 0.0%-0.1%, which was
expected. But they threw a curveball by not starting to taper their bond
purchases as some had anticipated. Instead, they decided to stick with the
March levels and push the decision on a bond-buying reduction plan to their
next meeting in July.

Even though they
delayed the tapering, the BoJ did signal that they plan to cut back on bond
purchases over the next 1-2 years. The BoJ also scheduled a meeting with bond market
participants for July 9-10 to discuss their policy decision.

Governor Ueda
mentioned in the post-meeting press conference that when they do decide to cut
back on Japanese Government Bond (JGB) purchases, it will be significant and
will start right after the July decision. He also hinted that a rate hike in
July could be on the table, depending on the data that comes in.

Traders and
analysts will be looking for signs of the bank’s confidence in the economy and
any hints of changes in monetary policy in response to inflation and economic
activity, especially with the recent soft patch of data we’ve had out of Japan.