The Bank of Japan (BoJ) upheld its loose monetary policy rhetoric and kept interest rates steady at the -0.10% level. This decision aligns with market expectations. The BoJ continues to maintain its yield curve control (YCC), leaving the reference interest rate for 10-year Japanese government bonds at 1.0% and keeping the target yield for 10-year bonds around 0%. This decision reaffirms the bank's ultra-loose policy, despite speculations that it might reverse course in the coming year.
Key remarks from the BoJ:
- The Japanese economy is gradually recovering. Future prospects remain uncertain due to global economic conditions and the modest growth in domestic private consumption.
- The BoJ notes a mild pickup in the Japanese economy alongside stable exports and industrial production.
- The BoJ anticipates the consumer price index to rise above 2% for the entire fiscal year 2024, but it expects a gradual decline thereafter.
- The core consumer price index is expected to rise gradually, reaching around half, after which the growth rate stabilizes.
- The BoJ analyzes the wage-price growth cycle and attaches great importance to corporate data and wage growth.
- The BoJ emphasizes the importance of monitoring financial and currency market movements and their impact on the economy and prices.
In the currency market, we observe a decisive reaction of the yen to the BoJ's rhetoric. The JPY is one of the weakest currencies among G10 countries today. The USDJPY pair gains approximately 0.80% and consolidates around 143.800. This marks the third consecutive day of gains for this pair. However, despite the rise, the USDJPY remains below the 200-day SMA. After weeks of dynamic declines, the exchange rate halted around the 141,000-142,000 support level. The first barrier for the current breakout is the 145.000 level, which also marked the local peak in July of this year.
Source: TradingView Created by TR4G
Comments
Post a Comment