The Bank of Japan (BoJ) Governor Kazuo Ueda stated in his Semiannual Report on Currency and Monetary Control on Wednesday that, given the current perspective for economic activity and prices, it expects accommodative financial conditions to be maintained for the time being.
The Bank of Japan (BoJ) will hold its Monetary Policy Committee (MPC) on Tuesday, December 19 and as we get closer to the Interest Rate Decision, here are the expectations forecast by the economists and researchers of 11 major banks.
Euro's broad based rally continues today as supported by a chorus of hawkish comments from ECB officials. But Sterling is outperforming on anticipation that BoE will continue with tightening next week, and probably more afterwards. Despite the strong showings by European majors, Australian Dollar still leads the pack for the week. With the week drawing to a close, it remains to be seen whether Euro and its counterparts can overturn this picture.
In a widely expected move, BoJ today unanimously voted to maintain its existing ultra-loose monetary policy. The central bank kept short-term policy rate at -0.10% under its yield curve control. Yield target on 10-year JGB remains around 0%, with fluctuation band allowed also maintained at about plus and minus 0.50% from the target level. BoJ reiterated its commitment to carry on with its Quantitative and Qualitative Monetary Easing with Yield Curve Control "as long as it is necessary" and affirmed it "will not hesitate to take additional easing measures if necessary."
In the wake of BoJ's decision to hold its monetary policy steady, we have seen an amplified sell-off in Yen, which is not surprising given the ongoing divergence in monetary policy with other major global central banks. The breaking of key levels in some crosses suggests that we might witness further declines in Yen, at least until Japanese authorities intervene once again.