USD/JPY flows:No change in rates but revised CPI higher

Aligned with our forecast, The BoJ has decided to keep rates unchanged at 0-0.1%. While the monetary policy statement is a short one, key economic forecast has been revised. 2024 less fresh food CPI has been revised higher to 2.8% from 2.4% and 2025 from 1.8% to 1.9%, while less fresh food & energy is unchanged in the big figure. 2024 GDP has been revised lower to 0.8% from 1.2% and 2025 unchanged. From the rhetoric "expect accommodative monetary conditions to continue for the time being" and "extremely high uncertainties on Japan's economic and price outlook", it echoes with our view that BoJ is in no rush to further tighten and would rather let data plays out their role. Tokyo CPI that missed estimate have been overlooked as market participants question the latest change of CPI calculation with high school tuition. Tokyo headline April CPI came in at 1.8%, less fresh food 1.6% and less fresh food & energy 1.8%.  

While market participants await Ueda's press conference, it is hard for him to be hawkish with the current forecast and statement. USD/JPY is seen trading 0.24% higher at 156.02 with JGB yields outpacing their U.S counterpart but has erased partial opening gains.