BoJ to leave monetary policy unchanged - Nomura

Analysts at Nomura expect the BOJ to leave monetary policy unchanged. 

Key Quotes:

"On 20-22 July, a number of media outlets including Jiji Press and Reuters reported that the BOJ could discuss adopting a more flexible monetary policy."

"However, in view of the increased focus on the side-effects of the current easing policy on earnings at financial institutions, we think all that will happen at the upcoming meeting is that methods of making adjustments toward a more flexible monetary policy will be debated and considered, and that there will be no immediate change in policy." 

"A key point is how the above debate related to taking a more flexible approach to monetary policy is described in the postmeeting statement (or sometimes in the Outlook Report), including whether it is actually mentioned at all. 

Similarly, a key point in the governor's postmeeting press conference will be how specific his statements are on what was discussed about adopting a more flexible monetary policy and specific ways to do this. 

We think these points will also be a litmus test for gauging when a decision will be taken to change the guideline for market operations to pave the way toward a more flexible approach to monetary policy."