Skip to content USDJPY Fundamental Analysis – 7-June-2024
USD/JPY—The Japanese yen steadied at around 155.7 per dollar as investors exercised caution ahead of the Bank of Japan’s (BOJ) policy meeting next week. This hesitation stems from the anticipation that the central bank will maintain its current interest rates. Additionally, market participants keenly observe whether the BOJ will scale back its monthly bond purchases.
Japan Ends Negative Interest Rate Era
This week, BOJ Governor Kazuo Ueda emphasized the central bank’s intent to reduce its substantial balance sheet gradually. However, the timeline for this reduction remains unclear.
This move follows significant changes in March when the BOJ ended its eight-year negative interest rate policy and abandoned its yield curve control program, marking a shift towards normalizing Japan’s monetary policy.
Japan Inflation Concerns Rise Again
Adding to the cautious sentiment, BOJ board member Toyoaki Nakamura highlighted concerns that Japan might not achieve its 2% inflation target next year if consumer spending weakens. This warning dampens expectations for any immediate interest rate hikes.
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