According to the Bank of Japan’s monetary policy decision on the 16th, they have decided to continue their current large-scale monetary easing policy centered around Yield Curve Control (YCC). There were no significant changes in their perception of the economy and prices.
In a survey conducted by Bloomberg among 47 economists from the 1st to the 6th of this month, more than 90% of the respondents predicted that the policy would be maintained at this meeting.
Governor Kuroda, who took office in April, has clearly expressed a stance of continuing the easing policy, stating that the cost of waiting for a rise in the underlying inflation rate is not significantly greater than a premature policy shift. This week, central banks in Japan, the United States, and Europe have all had their monetary policy meetings, with the Federal Open Market Committee (FOMC) deciding to hold off on further interest rate hikes after raising rates consistently for over a year. The European Central Bank (ECB) decided to raise rates by 0.25 percentage points on the 15th.
According to Yasuhira Okazaki, a senior economist at Nomura Securities, the results were in line with market expectations, and he sees it as symbolizing Governor Kuroda’s view on inflation. While there are expectations that prices may exceed the Bank of Japan’s projections, he mentioned that the lack of change in the overall assessment of prices indicates that the Bank of Japan is not yet ready to make easy adjustments.
Based on today’s Bank of Japan statement, the JPY is in a selling bias. Additionally, since CAD showed some buying interest earlier, I will look to buy CADJPY.