The yen came under pressure, with USD/JPY extending yesterday’s gains to push the 115.00 level as the Bank of Japan meeting was largely disappointed. No change in policy is on the horizon, and this is set to add pressure on the yen, according to economists at ING.
BoJ disappoints hawkish expectations
“The Bank’s inflation estimates are now 1.1% for both FY2022 and FY2023, compared to the previous 0.9% and 1.0%, respectively, figures that hardly suggest an imminent change in the BoJ’s ultra-dovish stance. Incidentally, Governor Haruiko Kuroda poured cold water on any speculation that a potential rate hike in 2024 was being discussed.”
“We think there is further room for the pair to rise on the back of rising US treasury yields in the near-term, and we expect a convergence to the early-January 116 levels.”
“For today, new signs of fragility in the equities as US markets re-open after a long weekend may help the yen find some stabilisation.”
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