The Bank of Japan decided to keep rates unchanged at 0.25% during today's monetary decision, which was in line with analysts' expectations. The distribution of bankers' votes was 8 voting to hold and one voting to hike, showing that at this point, BoJ officials are waiting for incoming data to confirm the legitimacy of continuing the hike cycle in view of the country's overall economic situation.
Central bank chief Kazuo Ueda speaks very dovishly during the press conference. He indicates that he needs economic forecasts to be fulfilled in order for interest rates to be raised. In terms of forecasts, he indicates that he is looking forward to spring price negotiations at large companies, which could lead to a sustained firming of inflation around the target. In his view, the lack of new information on the wage outlook has led to interest rates remaining unchanged.
Money markets predict that the BOJ will raise interest rates in early 2025. The Bank of Japan's March decision is expected to raise rates to 0.5%.
The USDJPY is up nearly 0.8% today, and is testing the highest levels since mid-November. It is worth mentioning that yesterday's increases were stimulated by the hawkish overtones of the Fed decision. The next important resistance level is around 157, slightly above the 78.6 retracement.
Source: xStation
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