BoJ unlikely to significantly change its optimistic growth and inflation outlook

The BOJ will issue an interim assessment of its Outlook for Economic Activity and Prices at this meeting, and based on the last three months of data, it is unlikely to significantly change the optimistic economic and inflation forecasts in the Outlook report released in April.

The BOJ might trim its growth forecast to account for a weaker export trend, but we do not expect any significant change in the overall picture of its forecast that Japan's economy would achieve above-potential growth this year.

With regard to inflation, exchange rates are roughly flat and oil prices have fallen back somewhat relative to 30 April, when the Outlook report was released. The market will be watching whether the BOJ reflects the resumption of oil pricedecline in its inflation outlook. 

"But even if it does so, the revision is not expected to be material this time around", says Bank of America.