JPY - BoJ unchanged and focus on GDP data

In Japan, the Bank of Japan (BoJ) is likely to maintain its monetary policy unchanged on Friday and retain its wait-and-see mode for the moment, as it just postponed the timing of achieving 2% price stability target to "around the first half of FY2016" from "in or around FY2015." 

An additional easing is expected via equity-linked ETFs and a 5bp reduction in IOER at the July meeting, as core CPI is likely to turn negative as early as in May.

However, at the current juncture, monetary policy is likely to remain unchanged. In terms of economic data, Q1 real GDP growth has likely slowed from last quarter. 

Barclays notes:

• We expect Q1 real GDP (Wednesday) to decelerate to +0.3% q/q (or 1.4% annualized), below the consensus forecast of +0.4% (+1.5%). 
  
  
• Within the expenditure component, we look for +0.1% growth in private consumptions, +1.2% in housing investment, +1.4% in private capex, -2.4% in public investment, +0.3% in public consumptions, and 0.1pp contributions from net exports. 
  
  
• Our Q1 growth outlook is revised up from our previous forecast of +0.1% (+0.6%), due mainly to weaker-than-expected March real imports. 
  
  
• We look for the March Index of Tertiary Industry Index (Monday) and March Index of All-Industry Activity (Thursday) to drop -0.5% m/m (consensus: -0.5%) and -0.4% m/m (consensus: -0.5%), respectively.