Results for: Bank of Japan

The Bank of Japan will release its policy statement and Governor Kazuo Ueda will speak on Friday. The timing of the release is uncertain, but it is expected to be between 0230 and 0330 GMT (22030 to 2330 US Eastern time on Thursday). Governor Ueda will speak shortly after, at 0630 GMT (0230 US Eastern time). The market is closely watching the statement and speech for any indication of a change in the BoJ’s ultra-loose monetary policy. In September 2022, the BoJ intervened to prop up the yen after former Governor Haruhiko Kuroda’s comments stressed the bank’s resolve to maintain the policy. Governor Ueda is likely to be cautious in his remarks to avoid causing market volatility. The BoJ is also expected to leave interest rates unchanged and maintain its guidance to keep buying government bonds at a pace of around 6 trillion yen per month.

The yen has weakened below the 155-per-dollar mark as the Bank of Japan (BOJ) embarks on its two-day rate-setting meeting. The currency has been under pressure, with the US dollar breaking above the key psychological threshold for the first time since 1990. Speculation has been rife that Japanese authorities may intervene to support the yen, but no such action has been taken yet. The BOJ is expected to maintain its ultra-loose monetary policy stance, making significant appreciation of the yen unlikely, despite its historically low levels.

The Japanese yen remained weak against the US dollar on Thursday, hovering around 155 yen per dollar as the Bank of Japan (BOJ) commenced its two-day rate-setting meeting. Market participants anxiously await any potential intervention from Tokyo’s policymakers. Despite speculation of intervention to support the yen, the dollar surpassed the psychologically significant 155 yen level, reaching its highest point since 1990. The BOJ’s policy deliberations are expected to maintain short-term interest rates unchanged, prompting expectations of continued gradual policy tightening and low terminal rates. This outlook makes it challenging for the yen to appreciate significantly, despite its historically low levels. However, BOJ Governor Kazuo Ueda has indicated a willingness to raise rates if inflation continues to accelerate towards the 2% target. Broader currency markets witnessed the dollar regaining ground after earlier losses, buoyed by upbeat business activity data from the euro zone and the UK. The euro and sterling rose but later retreated slightly, while the dollar remained firm against other major currencies.

The upcoming advance reading of US Q1 GDP growth holds significance for the Federal Reserve’s decision-making on interest rates and for the Bank of Japan’s potential intervention in the USD/JPY market. Stronger-than-expected growth may delay rate cuts, while weaker growth could suggest the need for earlier easing. The market consensus estimate for annualized GDP growth is 2.5%, with expectations ranging from 1.0% to 3.1%. Goldman Sachs forecasts growth at 3.1%. Data that falls outside of these expectations can have a significant impact on markets.

Asian markets are facing uncertainty due to the depreciation of currencies against the U.S. dollar. The Bank of Japan’s two-day policy meeting, South Korea’s GDP data, Malaysian inflation figures, and trade figures from Vietnam and Hong Kong will be key market movers. Concerns about the weakening yen could prompt intervention by the Japanese authorities. Indonesia’s recent rate hike has also raised eyebrows. Meanwhile, geopolitical tensions between the United States and China persist, with the U.S. Senate voting to potentially ban TikTok.

Bank of America (BoA) has issued a warning that the USD/JPY currency pair could rapidly climb to 160, citing the Bank of Japan’s (BoJ) limited ability to curb the yen’s rapid descent through communication alone. Despite the BoJ’s previous acknowledgment of the potential impact of a weakened yen on monetary policy and inflation, BoA believes that such statements are unlikely to provide sufficient support for the Japanese currency.

Traders remain cautious in the foreign exchange market, particularly regarding the USD/JPY pair. Speculation about potential intervention by the Bank of Japan (BOJ) is deterring aggressive activity, as traders await further guidance on Friday. The Australian dollar (AUD) has made slight gains, but AUD/USD remains limited. Analysts advise caution due to the high risk associated with yen trades. As traders observe the market, a gradual rise in prices is expected, potentially reaching 155.00. However, profit-taking and a possible overshoot could trigger intervention by Japan.

The Bank of Japan has gained some encouragement from the results of a recent business survey conducted from March to April 2023. The survey, which received responses from around 1,100 companies throughout Japan, indicates an optimistic outlook among businesses.

The Bank of Japan (BOJ) is scheduled to hold its monetary policy meeting on Friday, April 26. Scotia Capital provides a preview of the meeting, highlighting key developments since the last full forecast meeting in January and the BOJ’s policy change at the March meeting.

Japan’s annual business-to-business service inflation accelerated for the second consecutive month, reaching 2.3% in March, according to data released on Wednesday. The increase indicates that companies continue to pass on rising labor costs amid expectations of sustained wage gains. The trend aligns with the Bank of Japan’s (BOJ) view that service price increases will become a key driver of inflation, helping to maintain inflation around its 2% target.