The USD/JPY witnessed a decline following the Bank of Japan's monetary policy announcement. Attention will now be directed towards BoJ Governor Kazuo Ueda during the press conference.
On Tuesday, the Bank of Japan maintained its -0.10% interest rates, as anticipated. Notably, the Board unanimously agreed on retaining negative interest rates.
Based on the Bank of Japan Monetary Policy Statement,
The statement indicated a continued adherence to negative interest rates, influencing the demand for the Yen. However, potential changes could arise during the Press Conference. Bank of Japan Governor Kazuo Ueda recently expressed a willingness to move away from negative rates in the absence of wage growth.
Following the Bank of Japan's policy decision and statement, the USD/JPY initially dropped to a low of 142.245 before rebounding. It surged from 142.637 to a morning high of 143.782 before retracing slightly.
This morning, the USD/JPY was at 143.421, marking a 0.46% increase.
The housing sector's performance on Tuesday is a key consideration, with economists predicting declines in US housing starts and building permits for November.
Additionally, investors should take note of Federal Reserve discussions. Hawkish comments may influence market expectations regarding a Fed rate cut in Q1 2024. Short-term USD/JPY trends may be affected by the Bank of Japan press conference and US economic indicators. Furthermore, Friday's data on personal outlays and inflation could impact expectations for a Q1 2024 Fed rate cut.
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