BoJ may get less dovish, GDP to fall in Q1

PM Kishida’s two new Bank of Japan policy board nominations could push the Bank in a slightly less dovish direction, but it won’t make much difference to policy decisions over the next year. A more meaningful shift may come early next year if the Prime Minister opts to install a more hawkish BOJ leadership when Governor Kuroda and his deputy governors Amamiya and Wakatabe step down. But we expect inflation to fall well below target next year, so a policy rate hike probably won’t be on the table by then.