When is the BOJ rate decision and how could it affect USD/JPY?
|Early on Friday, the Bank of Japan (BoJ) will provide the decision of its emergency monetary policy meeting. The central bank is widely expected to announce stimulus for small businesses, financial institutions during the unscheduled meeting while keeping the short-term interest rate target at -0.1% and directing 10-year government bond yields toward zero.
However, crucial to the Japanese Yen (JPY) traders will be the tone of the central bank statement towards broad policy measures. Even if the BOJ Governor Haruhiko Kuroda has recently started following the footsteps of other major central bankers while defying negative rates, his readiness to do whatever it takes makes every BOJ meeting the key.
Westpac follows the broad market consensus while saying,
The Bank of Japan will also hold an ad hoc meeting with no change expected in key policy settings, instead focused on details of a funding program for small businesses.
How could it affect the USD/JPY?
While the BOJ meeting is less likely to offer any major monetary policy change, the Japanese central bank stays ready to act, as always, which in turn keeps the room for a surprise signal of the future moves. It’s worth mentioning that the BOJ Governor Kuroda has already downplayed the negative interest rates and hence details for the addition to the Quantitative Easing (QE) will be looked for. Should the BOJ manage to keep a downbeat tone, USD/JPY may refresh the monthly high beyond the key 108.10 resistance.
Technically, the USD/JPY pair has been struggling since mid-April to cross 108.10 that holds the key for the quote’s rise to April monthly high surrounding 109.40. On the contrary, an ascending trend line from May 07, at 107.55 now, can check sellers during the fresh fall.
Key Notes
USD/JPY holds onto recovery gains below 108.00 ahead of BOJ
USD/JPY Forecast: Losing its bullish momentum but not far from its weekly high
About BoJ Rate Decision
BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.