Ueda speech: Will not rule out the possibility of selling BoJ’s government bond holdings
Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday that the central bank “will not rule out the possibility of selling the BoJ’s government bond holdings.”
Earlier in the day, Ueda said that the central bank “will adjust the degree of monetary easing if the 2% inflation target is likely to be achieved.”
Additional quotes
Will conduct appropriate monetary policy to achieve 2% target in a stable and sustainable manner.
Real estate prices are rising in big cities due to rising construction costs, modest economic recovery.
We see no overheating in real estate market although attention is needed to pace of real estate price rises.
We'll carefully examine various risk factors including real estate price developments.
Market reaction
USD/JPY was last seen trading at 149.60, up 0.20% so far.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
