The bank is not expected to make any major moves, given the inflationary trend in Japan will be significantly weaker than those in other parts of the world.
“While we expect headline inflation to rise further over the coming months, in contrast to many other large advanced economies Japan is unlikely to experience significant ‘reopening’ inflation, due to lower pent-up demand and far stickier inflation expectations,” said Capital Economics Japan economist Tom Learmouth.
“We think underlying inflation will rise as price pressures in the services sector build further due to a likely vaccine bounce in the second half of this year,” he added. “However, we doubt underlying inflation will overshoot its pre-virus average by much.”
Japan has seen a much smaller virus outbreak than many countries, with just over 14,000 deaths, and it has avoided the harsh lockdowns used elsewhere.
A virus state of emergency that largely bans the sale of alcohol by bars and restaurants and asks them to close by 8pm will end on Sunday.
But it will be replaced in Tokyo and other economic hubs like Osaka with measures that will still restrict opening hours and only allow alcohol sales until 7pm.
Japan’s vaccination programme is picking up after a slow start. Around six percent of the population is now fully vaccinated.