Japanese Yen unlikely to strengthen on a more sustained basis at the current juncture – MUFG
|The Japanese Yen (JPY) has strengthened after today’s BoJ policy meeting resulting in USD/JPY falling back towards the 147.00 level. Economists at MUFG Bank analyze Yen’s outlook.
BoJ policy update supports outlook for rate hike in April
The comments from today’s policy meeting support our view that the BoJ will exit negative rates at the April policy meeting rather than waiting until June. It was backed up by Governor Ueda indicating ‘we can make some judgements on wages at smaller companies by looking at other economic data and from hearings with companies’.
While we expect the BoJ’s exit from negative rates to encourage a stronger Yen alongside rate cuts from other major central banks such as the Fed, recent price action has highlighted that it is still likely premature to expect the JPY to strengthen on a more sustained basis at the current juncture.
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