When is the BOJ rate decision and how could it affect USD/JPY?

BOJ overview

The Bank of Japan (BOJ) will publish the monetary policy statement and rate decision approximately at 03:00 GMT. 

The central bank is expected to retain short-term interest rate target at -0.1% and keep directing 10-year government bond yields toward zero. 

"The economy is still going strong, which calls for patience considering the limited tools left at the BOJ's proposal," according to analysts at Danske Bank. 

Meanwhile, TD securities analysts feel the BOJ has the last mover advantage in following the European Central Bank (ECB) and the Federal Reserve (Fed) and will likely take comfort in recent yen weakening and backup in bond yields. The ECB cut rates by 10 basis points and announced fresh bond-buying program last week. The divided Fed cut rates by 25 basis points on Wednesday and signaled another rate cut before the year-end. 

That said, most economists believe the BOJ's next move is further easing and the central bank may pull the trigger if consumption slows down sharply following next month's sales tax hike. 

TD Securities says:

We do see a growing risk that a YCC tweak occurs in October to enhance flexibility and alleviate negative yields. This meeting could hint at an enhanced curve corridor or YCC curve rolldown.

Impact on JPY

Today's BOJ decision may not have a big impact on the Japanese Yen, unless BOJ uses strong words to communicate readiness to ease if tax hike leads to a consumption slowdown, in which case USD/JPY rise toward the 200-day moving average (MA) located at 109.45. 

About BoJ Rate Decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BOJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.