Beyond the interest rate decision, investors must consider other policy tweaks. Possible policy tweaks may include ending the yield curve control policy (YCC).
Significantly, the BoJ may ignore recent economic indicators that sent mixed signals. Japan narrowly avoided an economic recession in Q4. However, the BoJ expects substantial wage hikes to fuel consumer spending and demand-driven inflation.
The BoJ monetary policy decision and monetary policy statement need consideration. Later in the session, the press conference also warrants investor attention. Intentions vis-à-vis further rate hikes and the outlook for the economy and inflation are likely focal points.
On Tuesday, US building permits and housing starts will garner investor interest. Economists forecast housing starts to increase by 7% in February after sliding 14.8% in January. However, economists expect building permits to slip by 0.2% after falling 0.3% in January.
While the monthly figures will draw interest, investors must consider housing sector data trends.
An improving housing market could boost consumer confidence and spending. Consumer spending could fuel demand-driven inflation and delay the timeline for Fed rate cuts. A higher-for-longer Fed rate path could impact borrowing costs and reduce disposable income. Downward trends in disposable income could curb consumer spending.
