On the morning of April 18, Beijing time, the Bank of Japan will hold an interest rate decision.Economists believe new Governor Kazuo Ueda is unlikely to start changing his ultra-loose policy stance.
Kazuo Ueda, the new BOJ governor, has assured markets that nothing will change anytime soon after last month’s banking turmoil
Nearly 90% of economists surveyed believe the chances of a sudden adjustment in Ueda’s first rate review have now decreased.
Since taking over from Haruhiko Kuroda earlier this month, Ueda has assured markets that any changes, such as tweaks or an end to the controversial yield curve control (YCC ) ) policies, neither will happen any time soon.
The BOJ is likely to keep the YCC unchanged at this week’s meeting, pending more evidence of sustained wage growth, the sources said.
The April 12-19 poll showed just three (11%) of 27 economists thought the BOJ would start scaling back its monetary stimulus this week, while 11 (41%) thought it would take until a June decision to act.
In a March survey, April and June each received about a quarter of analysts’ votes asking when the BOJ would unwind its bond purchases.
Hiroshi Watanabe, senior economist at Sony Financial Group, said: “Kazuo Ueda said at his inauguration press conference on April 10 that ‘YCC is appropriate,’ so we moved forward the policy shift forecast to June.”
Another question showed that 6 of the 25 respondents (24%) predicted that YCC would end in April-June, 3 (12%) predicted that it would end in July-September, and 5 (20%) predicted that it would end in 10- December ends.
Mari Iwashita, chief market economist at Daiwa Securities, has pushed back her forecast to the fourth quarter from the third quarter in the last survey, citing the possibility of a national election in Japan in the summer, which could deter the BOJ from taking an aggressive move.
Asked what the BOJ would do if it revises the policy before ending YCC, economists were split between those expecting a widening of the tolerance band around the 10-year yield target (52%) and those expecting a widening of the tolerance band around the 10-year yield target The target is expected to shift to shorter-dated bond yields (48%). Compared with last month, more analysts believe it is the latter.
Based on the above news, the Bank of Japan is expected to maintain an ultra-loose policy stance this week, which will have little impact on USD/JPY. In the future, the exchange rate needs to pay attention to the economic data of the United States and Japan, as well as the monetary policy tendency of the Federal Reserve.
USD/JPY daily chart
At 10:23 on April 24th, Beijing time, USD/JPY was at 134.17/18