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Breaking: USD/JPY slips as BOJ leaves policy settings unadjusted

Following the conclusion of its two-day policy review meeting on Thursday, the Bank of Japan (BOJ) board members decided to leave its monetary policy settings unchanged, holding rates at -10bps while maintaining 10yr JGB yield target at 0.00%.

Summary of the statement

The BOJ vote was 8 to 1, leaving its pledge to buy JGBs unchanged so that its holdings increase at an annual pace of around 80 trln yen.

BOJ board member Kataoka dissented to decision on the YCC.

BOJ repeats April market ops guidance to offer to buy 10-year JGBs at 0.25% every business day unless it is highly likely no bids will be submitted.

BOJ keeps guidance on policy bias, says to take more easing steps without hesitation as needed with eye on pandemic's impact on economy.

BOJ keeps forward guidance on interest rates, says expects short- and long-term policy rates to remain at 'present or lower' levels.

Market reaction

The yen caught a fresh bid on the expected BOJ announcement, smashing the USD/JPY pair down to test the 138.00 level. The pair was last seen trading flat on the day at 138.25.

About BOJ Interest 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.

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