Ueda upholds BoJ's will to raise interest rates 🏛️

The BOJ kept the short-term interest rate unchanged at 0.25%, in line with widespread expectations, now maintaining a cautious approach to monetary tightening. On the other hand, however, the slightly more hawkish tone of Governor Kazuo Ueda's comments is laying the groundwork for future rate hikes in Japan.

Ueda maintained a hawkish stance on planned monetary policy in Japan. The banker communicated that recent data confirms that the economy is growing in line with forecasts, suggesting that the BoJ intends to raise interest rates. This was confirmed by Ueda himself, who added that there was no change in the stance on raising rates if the economy sticks to the path forecast by the bank. Kazuo Ueda concluded the statement with a mention of rising wages, which will bolster private consumption in the Land of the Cherry Blossom and thus prompt the BoJ to raise its forecast for underlying inflation. 

Despite relatively hawkish comments, the Bank of Japan is not yet ready to raise interest rates more strongly, Ueda himself admonished, given the macroeconomic uncertainty in Japan and the broader global economy. By the end of this year, however, the money market estimates a 10 basis point hike in Japan, with a 30% chance of an additional such move. 

USDJPY slightly extends upward movement after BOJ decision to keep rates unchanged. Technically, the downtrend continues all the time, as evidenced by the downward-sloping 50-day, 100-day and 200-day exponential moving averages 

Source: xStation