Source: Golden Ten Data
The Bank of Japan stood still and cancelled the scale of debt purchases using the same wording as before. The yen continued to fall after the announcement of the resolution...
On Friday (April 26), the Bank of Japan announced its latest interest rate decision and decided to stay on hold and maintain the benchmark interest rate at 0-0.1%, in line with market expectations. The resolution was passed on a 9-0 scale.
Before the resolution was announced, some economists expected the authorities to increase hawkish hints to support the yen. However, the Bank of Japan's latest statement still stated that it is expected that the current relaxed financial environment will continue, and “the financial situation has always been relaxed.” If the price trend increases, the degree of monetary easing will be adjusted.
One of the highlights of this resolution is the latest quarterly outlook. According to the statement, the Bank of Japan lowered its GDP growth forecast for the 2024 fiscal year and raised the inflation forecast for the 2024 and 2025 fiscal years.
Among them, the median real GDP growth rate forecast for the 2024 fiscal year is 0.8%, compared to 1.2% in January. The median forecast for real GDP growth in FY2025 is 1.0%, compared to 1.0% in January. The median forecast for real GDP growth in the 2026 fiscal year is 1.0%. Basic inflation is expected to rise gradually. The median core CPI forecast for FY2024 is 2.8%, compared to 2.4% in January. The median core CPI forecast for FY2025 is 1.9%, compared to 1.8% in January. The median core CPI forecast for FY2026 is 1.9%.
The Bank of Japan abandoned the phrase of buying the same amount of bonds as before, and will buy Japanese treasury bonds and corporate bonds in accordance with the March decision. Before the resolution was announced, Japanese media also speculated that the Japanese authorities would consider reducing the amount of government bonds purchased. Reducing purchases of treasury bonds would be seen as weakening the Bank of Japan's dovish stance.
The Bank of Japan said it is necessary to focus on foreign exchange and its impact on inflation.
After the announcement of the resolution, the US dollar rose by nearly 50 points against the yen in the short term, then continued to expand its gains. As of press release, the yen continued to fall. The dollar broke 156 against the yen and rose 0.24% during the day. Japanese treasury bond futures fluctuated after the Bank of Japan policy meeting.
Bank of Japan Governor Kazuo Ueda will hold a press conference in Tokyo at 14:30 Beijing time to explain in detail the ideas behind the above decision, the future direction of interest rates, and the outlook for inflation.
Edit/Jayden