Moody's: BoJ still some way from ending accommodative monetary policy

"the Bank of Japan (BoJ) will likely only exit its accommodative monetary policy once the inflation rate systematically moves close to the central bank's 2% target, a development which the BoJ Policy Board currently forecasts not to happen until 2019," Moody's Investors Service said in a report on Thursday.

Key quotes:

"The BoJ hopes that its commitment to an above-2% inflation rate by 2019 will be achieved by raising inflation expectations, which will in turn be incorporated in the annual wage negotiations process between labor unions and business."

"Moody's expects Japan's central bank will continue its current strategy of yield curve control until inflation expectations and the inflation rate firmly and permanently rise to above 2%."

"In contrast to the Fed and the ECB, the BoJ's policy stance is much more a communication strategy to influence expectations of market participants when wages and prices are set, than a policy to stimulate growth. Until its inflation goal is achieved, the challenge for Japan will be to keep yields low even as global interest rates rise."