Asia’s upcoming week: Central bank meetings in China, Japan, and Indonesia, plus important economic releases from China, Taiwan, and South Korea

Bank of Japan Poised to Hold Rates Steady

After raising rates in December, the Bank of Japan is anticipated to maintain its policy rate at 0.75% this Friday. Investors will pay close attention to Governor Ueda’s comments, particularly on how the recent decline in the yen could influence inflation trends. In addition, the central bank is set to publish its latest quarterly outlook.

Projections for GDP growth in fiscal years 2025 and 2026 are likely to be revised upward, reflecting the impact of government stimulus measures and strong global demand for semiconductors. While government subsidies may offer short-term relief from inflation, rising wages and a weaker yen are expected to keep core inflation above 2% through fiscal years 2026 and 2027.