(Bloomberg) -- The Bank of Japan is planning to review guidance on its policy rate in light of the government’s plans to lower the classification of Covid-19, the Nikkei newspaper reported Friday, without attribution.

The BOJ was also seen keeping its yield curve control policy unchanged at Friday’s meeting and considering a comprehensive review of past monetary easing decisions, as previously reported.

The yen saw a modest spike after the report before reversing gains, while Japan’s bond futures held a decline. Japanese bank shares gained. Governor Kazuo Ueda will shortly conclude his first monetary policy meeting. 

“Investors may hope a new governor will potentially bring new forward guidance,” said David Forrester, senior FX strategist at Credit Agricole CIB Singapore Branch. “Investors could even view such a change as a harbinger of more substantial changes to monetary policy down the road.”

The dropping of the “additional easing” and/or “lower levels” clauses in the central bank’s forward guidance would be a move toward a neutral bias and positive for the yen, Forrester added.

The BOJ’s current guidance refers to the impact of Covid-19, and states that it expects short and long term policy interest rates to remain at their present or lower levels. It also says the bank won’t hesitate to take additional easing measures if necessary.

BOJ watchers widely expect Ueda won’t make a big splash at his first meeting, leaving interest rates and asset purchase settings unchanged. Ueda himself has recently said it’s appropriate to continue with monetary easing including the yield curve control program, given current economic and price conditions. 

Still, data Friday showed inflation in Tokyo unexpectedly gained renewed upward momentum, pointing to a stronger-than-thought underlying price trend. The BOJ will also release its latest inflation projections.

“The markets, from bonds to currencies to stocks, got caught with surprise as investors are all waiting for the decision,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank. “From here, for an hour or so, the market will regain calm and wait for the decision.”

--With assistance from Yumi Teso and Masaki Kondo.

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