BOJ to scrutinize inflation trends amid policy tweak speculation

The dovish Bank of Japan faces a tough two-day policy-setting meeting from Thursday due to potentially changing inflation dynamics, with edgy financial markets seesawing over whether its controversial yield cap program will be modified.

The BOJ is widely expected to revise upward its earlier inflation forecast for the current fiscal year to next March, given more evidence that price hikes, initially prompted by surging fuel and raw material costs, have been broadening in a notable change for the once deflation-mired nation.

Financial markets are fixated on whether Governor Kazuo Ueda, who has ...