When is the BOJ rate decision and how could it affect USD/JPY?

On Friday, the Bank of Japan (BoJ) will conclude its latest monetary policy meeting approximately at 2:00 GMT. The central bank is widely expected not to announce any changes in its key policy actions by holding short-term interest rate target at -0.1% and keep directing 10-year government bond yields toward zero.

With the absence of quarterly outlook, the BoJ meeting is more likely to turn out as a non-event. However, comments from the Governor Haruhiko Kuroda during a press conference after the rate statement could become important. Investors seek for future policy decision considering the central bank’s sustained favor for a 2.0% inflation target that has been criticized off-late. Adding to the importance of Kuroda’s speech will be a recent increase in the Japanese Yen (JPY) and how the central bank sees its role during such times.

TD Securities mention in their report,

“Recent comments from BoJ Governor Kuroda highlight that further easing could be contingent on the JPY. If the JPY strengthens BoJ could consider options such as further lowering short term rates, buying more assets, increasing the monetary base or cutting the long term yield target. None of these are likely to be on the table as the JPY has weakened from 108 to 112 so far this year.”

Goldman Sachs says, 

“Specifically, we expect the BOJ to maintain its short-term policy rate target of -0.1% and 10-year yield target of 0% (leaving the band for 10-year yields at ±20 bp) and make no changes to its program of ETF and other risk asset purchases.”

“Also, we expect the BOJ to maintain its long-term JGB purchase guideline of increasing its net holdings at a pace of about ¥80 tn per year.”

“Discussion at the meeting will focus on evaluating January data, especially production and export data, which were notably weak.”

“The BOJ will likely need to lower its production and export assessment, in our view, while it is likely to maintain its overall economic assessment.”

How could it affect the USD/JPY?

Latest questions on the central bank’s inflation target and weak data might push the Governor Kuroda towards accepting challenges to the BoJ’s 2.0% target framework, which if happens could offer intermediate strength to the JPY on expectations of a policy change. However, only mention of economic pessimism and avoiding signals for a policy change could keep dragging the JPY downwards.

Technically speaking, the USD/JPY pair is heading towards 112.10 resistance level with 112.30 and 112.60 in focus afterward. Should the pair declines, 111.40-30 area comprising 100-day and 200-day simple moving averages (SMAs) seem crucial to watch as it holds the gate for the pair’s further downside to 110.80.

Key notes

USD/JPY clings to daily gains above 111.50

USD/JPY Technical Analysis: Bulls looking at the 112.00 figure

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD remains on the back foot amid ongoing trade concerns

EUR/USD is trading around 1.1150, the lowest in over two weeks. Markets are worried about US-Sino trade tensions as US companies stop working with China's Huawei and as China may ban these firms.


GBP/USD consolidates its losses amid Brexit pessimism

GBP/USD is trading in the low 1.2700s, close to the lowest since January. UK PM May is set to present a new plan after cross-party talks failed and as her successors are waiting for her resignation.


USD/JPY rebounds to 110 as Wall Street starts erasing early losses

After edging higher to a two-week high of 110.30 during the Asian session, the USD/JPY pair reversed its direction and erased 50 pips to touch a session low 109.80 in the early trading hours of the NA session before rebounding modestly.


Gold struggles to recover above $1280 despite stocks selloff

The troy ounce of the precious metal lost nearly $10 last week pressured by the broad-based USD strength and struggled to stage a meaningful recovery today. As of writing, the XAU/USD pair was down 0.09% on the day at $1276.60.

Gold News

Top 3 Price Prediction Bitcoin, Ripple, Ethereum: Updating the bullish signal level, now at $8,250 BTC/USD

The ceiling of the bear channel stops an army of Bitcoiners ready to go to the Moon. ETH/USD may extend its gains despite Bitcoin weakness. XRP/USD is facing increased volatility.

Read more