The Outlook for Economic Activity and Prices revealed that members of BoJ have toned down their inflation expectations marginally for both 2024 and 2025

The range for core (ex fresh food and energy) has narrowed for 2025, even if the median remains at 1.9%, while the headline (ex fresh food) expectations have already been toned markedly for 2024.

The BoJ members probably need to become MORE scared of inflation than now to move the needle in April (also given Uedas comments this morning) and core inflation is en route to slightly undershoot on the 2024 projections from the BoJ given recent trends (0.05% MoM trend).

Spring “wage talks” will be important, but we doubt that they will be sufficient to scare the BoJ into action by the early innings of the 2024 fiscal year.

The JPY is up a tad on the back of the meeting, but we suspect that it is mostly driven by the overall positive repricing of the Asian outlook after reports of a Chinese equity emergency package emerged. We are yet to be convinced by the increasingly panicky efforts to stabilize the Chinese market -and economy and we will release a status update from China later today.

Chart 1: Bank of Japan inflation forecast