USD/JPY steadies around 130.80 despite the BOJ’s monetary policy minutes releases
|- USD/JPY is struggling at around 130.75 as BOJ’s monetary policy minutes fail to bring an action.
- The BOJ will continue to stick with an ultra-loose monetary policy going forward.
- Higher US NFP is advocating for a consecutive jumbo rate hike by the Fed.
The USD/JPY pair has failed to deliver an action-pack performance despite the Bank of Japan (BOJ) releasing its monetary policy minutes. The minutes belonged to the monetary policy announced by the BOJ in March.
The decision came in line with the forecast of -0.1%. The BOJ policymakers adopted a ‘neutral’ stance on the policy rates as the institution is committed to releasing more stimulus packages to spurt the aggregate demand in the economy. The Japanese economy has yet not reached its pre-pandemic growth levels. Also, the inflation rate is very much low in the economy which seeks attention despite a recent rise in energy bills and food prices for the households.
Meanwhile, the US dollar index (DXY) is advancing higher and is expected to recapture its previous week’s high at 104.06. The DXY has remained in the grip of bulls as higher-than-expected US Nonfarm Payrolls reported last week have strengthened the odds of a consecutive jumbo rate hike by the Federal Reserve (Fed). The US administration has managed to add 428k additional jobs to the total labor force, which were higher than the estimates of 391k. A tight labor market is advocating a continuation of the hawkish stance by the Fed. Now, investors are eyeing the release of the US Consumer Price Index (CPI), which is due on Wednesday. The US CPI is expected to print at 8.1%, lower than the former print of 8.5%.
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