Research Team at BBH, notes that the Bank of Japan left policy unchanged, as widely anticipated. Key Quotes “Its assessment was seen as somewhat less dovish than many expected. While acknowledging that the improvement in exports has paused, and inflation expectations fell recently, updated forecasts will be presented next month. We do not understand Kuroda to rule out further easing next month. The 10-year breakeven was near 50 bp before the BOJ adopted negative interest rates at the end of January. It slipped below 13 bp on February 18 when it bottomed. It was near 35 bp before this past weekend. Perhaps more importantly, though not on most calendars, tomorrow major Japanese employers, especially in the auto and electronics sectors will indicate wage plans for the next fiscal year that starts 1 April. Despite what economists regard as full employment in Japan, wage growth has been poor. In fact, it could be argued that the failure to boost wages lies at the heart of the disappointment over Abenomics. Businesses will likely limit this wage round due to the prospects of lower profits and economic uncertainty. When stripped of its rhetoric flourishes, Abenomics appears to have accentuated the disparity in the rather homogenous Japanese society. Recent polls show waning support for Abe and his cabinet. However, the opposition both within the LDP and in other political parties is fragmented and seemingly devoid of a clear alternative.” For more information, read our latest forex news.