(IMES Newsletter) 2026 BOK/ERI - BOJ/IMES Joint Research Workshop
At a Glance
The desk believes that the recent joint workshop between the Bank of Korea and the Bank of Japan signals a collaborative approach to regional monetary policy, which could influence currency dynamics in the coming months. Per the full note source, discussions included key stakeholders such as the Bangko Sentral ng Pilipinas and the Reserve Bank of Australia, highlighting a broader regional focus on economic stability. The upcoming GDP growth rate and trade balance data for Japan could further inform market sentiment and positioning. As such, traders should remain vigilant about how these developments may impact the JPY's trajectory against major currencies.
Full Analysis
What the desk is arguing
The desk posits that the collaborative efforts between the Bank of Korea and the Bank of Japan, as evidenced by their recent joint workshop, may lead to a more synchronized monetary policy approach in the region. This could have significant implications for the JPY, particularly as both central banks navigate post-pandemic economic recovery.
Supporting this view, the desk notes that the upcoming GDP growth rate and trade balance data for Japan, scheduled for May 19, will be critical in shaping market expectations. With Japan's economy showing signs of resilience, any positive surprises in these indicators could bolster the JPY against its peers.
Where it sits in our coverage
Our consensus target for USD/JPY is 1.075, with a range of 1.04 to 1.12. Specific firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This desk's view aligns closely with jpmorgan, which anticipates a stronger JPY, while diverging from bofa, which remains more cautious. Given the current consensus, the desk's call sits near the upper bound of the expected range.
How other firms see it
Firms aligned with our view include jpmorgan and citi, both anticipating a strengthening JPY as economic data supports a more hawkish stance from the Bank of Japan. Conversely, bofa and goldman express skepticism about the JPY's strength, citing potential headwinds from global economic uncertainties.
Traders should also monitor the USD/JPY pair closely, as shifts in sentiment towards the Bank of Japan's policy could have spillover effects on the broader FX market, particularly against the backdrop of upcoming economic indicators.
What the calendar says
With the GDP growth rate and trade balance data for Japan set to be released on May 19, these events will be pivotal in shaping market expectations ahead of the next monetary policy discussions. Traders should prepare for potential volatility in the JPY as these data points could either reinforce or challenge the current consensus view.
What changed vs prior statement
- 01BOJ revised Consumption Activity Index methodology following 2020 GDP base year revision and structural economic changes.
- 02BOJ held 9th joint research workshop with Bank of Korea, involving central banks from Philippines, BIS, and Australia.
- 03English version of consumption index revision paper under preparation; currently available only in Japanese.
From the original
IMES Newsletter : BOK/ERI-BOJ/IMES Joint Workshop April 30, 2026 Institute for Monetary and Economic Studies Bank of Japan IMES Newsletter : BOK/ERI-BOJ/IMES Joint Workshop (Link to the IMES website) The Bank of Korea and the Bank of Japan held the 9th joint workshop in March 2026. Researchers from both central banks, Bangko Sentral ng Pilipinas, the Bank for International Settlements, and the Reserve Bank of Australia had lively discussions. IMES Newsletter (Link to the IMES website) The IMES…
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4 items(IMES Newsletter) 2026 BOK/ERI - BOJ/IMES Joint Research Workshop
Lead — The desk anticipates a strengthening of the JPY in light of recent discussions between the Bank of Korea and the Bank of Japan regarding monetary policy collaboration. Per the full note [source], the joint workshop highlighted the importance of regional economic stability, which could influence the JPY's trajectory. With upcoming GDP data on May 19, traders should be vigilant about potential shifts in market sentiment. Current positioning suggests a cautious approach as the market digests these developments.
Regional Economic Report (Summary) (Apr. 2026)
The desk interprets the Bank of Japan's latest Regional Economic Report as a sign of moderate economic recovery across all regions, which could support a stable JPY outlook. Per the full note [source], the report indicates that while all nine regions are experiencing recovery, there are pockets of weakness that may temper aggressive bullish sentiment. With upcoming GDP data due on May 19, traders should brace for volatility as these figures could influence monetary policy expectations. Overall, the consensus among firms suggests a cautious but optimistic view on JPY, aligning with our target range.
Asia week ahead: Rate decision in Korea and key data from Japan, China, Taiwan
The upcoming economic developments in Asia are pivotal as South Korea prepares for its rate decision amidst critical data releases from Japan, China, and Taiwan. Per the full note from ING Economics, the Korean central bank's decision will be essential in navigating near-term currency stability and investor sentiment. The recent trajectory in economic indicators suggests a cautious stance from the BoK, especially in light of persistent inflationary pressures. Japanese exports have also shown promising growth, with a reported 6.2% increase in the latest data, which plays into expectations for the JPY amid global trade dynamics. Traders should remain alert to shifts from these major economies as they influence the FX landscape significantly.
Output Gap, Potential Growth Rate, and Labor Market Indicators
The desk sees the Bank of Japan's recent focus on the output gap and labor market indicators as a pivotal shift in understanding Japan's economic landscape. Per the full note [source], the BOJ is emphasizing the output gap's role in assessing aggregate supply and demand, while also integrating labor market metrics to better gauge wage and price trends. This dual approach signals a potential pivot in monetary policy as labor constraints become more pronounced. With upcoming GDP data on May 19, traders should remain vigilant for any shifts in the BOJ's stance that could impact JPY valuations.
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