On Thursday (September 22), the yen fluctuated violently during the Asian period. The Bank of Japan maintained interest rates as scheduled, but said it would take additional easing measures without hesitation when necessary, and the wording was unexpectedly dovish. The market expects the Federal Reserve to raise interest rates further sharply in the future. The interest rate gap between the United States and Japan further widens, causing the yen to continue to depreciate. The US dollar rose nearly 100 points against the Japanese yen in the short term to around 145.38, the highest since August 1998, with an intraday increase of about 0.9%; but then the US dollar plunged about 190 points against the Japanese yen to around 143.51. On the one hand, it was because the Bank of Japan raised its GDP growth expectations, and on the other hand, some yen short sellers closed their short positions on the occasion of the dovish interest rate decision.
However, given that the Bank of Japan's interest rate resolution is dovish and the yen is generally weak, the US dollar has rebounded to around 144.85, still rising more than 40 points from before the interest rate resolution.
The Bank of Japan maintains its benchmark interest rate at an all-time low of -0.1%, maintains its 10-year Treasury yield target near 0%, and the Bank of Japan maintains forward-looking guidance on interest rates, saying it expects short-term and long-term policy rates to remain at current or lower levels.
or above meets market expectations.
However, the Bank of Japan unexpectedly stated that the special financing plan for the new crown epidemic will not end at the end of September and will take additional easing measures without hesitation when necessary, while paying attention to the impact of the epidemic on the economy.
The Bank of Japan stated that it is necessary to be vigilant about the trends in the financial and foreign exchange markets and their impact on Japan's economy and prices.
Bank of Japan pointed out that inflation is within the range of 2.5%-3%, and core consumption inflation will remain around 2.5%. The pressure on rising prices in Japan may be on the rise, but the rise in core consumer inflation may slow down, the Bank of Japan said that despite rising commodity prices, the Japanese economy is still recovering. Affected by rising prices of energy, food and durable goods, core consumer prices in Japan may accelerate by the end of the year. As the impact of the epidemic and the ease of supply restrictions, the Japanese economy may recover.
The Bank of Japan said that it will gradually stop the special fund supply operation and extend the special financing plan for the new crown epidemic by 3-6 months. The Japanese economy faces extremely high uncertainty and will not set a capital allocation upper limit. It will continue to conduct fixed interest rate market operations every day at a fixed interest rate of 0.25%.
The Bank of Japan lowered its evaluation of the global economy, but raised its GDP growth forecast.
analysts support it, considering that this interest rate resolution is so dovish, it is not surprising that the yen further weakens. There is no sign of change in the current policy trend.
This article is from Huitong.com
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