The Bank of Japan refuses to budge on yield curve control policy.
After a two-day monetary policy meeting, and in defiance of market predictions, the Bank of Japan (BoJ) kept its ultra-low interest rates and bond yield limit in place on Wednesday 18th January.
The market had expected the BoJ to increase the target rate on 10-year bonds above 0%, increase the range within which rates might depart from the goal by more than 0.5 percentage points, or abandon yield curve control (YCC) completely.
In an effort to demonstrate its determination to continue implementing its YCC policy for the time being, the BoJ amended the rules for a funds-supply market operation on Wednesday to make it possible to use it as a tool to prevent long-term interest rates from rising excessively.
Some experts saw this action by the BoJ as an indication that Governor Haruhiko Kuroda would hold off on making significant policy changes during his tenure, which expires on April 8th, rather than revising its stimulus program.
BoJ confident of economic recovery despite global risks
Even though it is anticipated that Japan's economy will be subject to downward pressure due to high commodity prices and slowdowns in economies outside the country, the bank’s statement said that it is likely that the economy will “recover towards the middle of the projection period.”
The BoJ further implied that this would be because new coronavirus effects are diminishing and supply-side limitations are relaxing. After that, a positive cycle of rising incomes and rising spending is expected to keep Japan's economy growing at a pace above its potential growth rate.
Core consumer prices in Japan's capital, a leading indicator of national trends, increased by 4.0% in December from a year earlier, exceeding the central bank's 2% inflation target for the seventh straight month, according to a report released on the 9th of January.
The ongoing situation in Ukraine and changes in commodity prices, notably grain prices, have been troublesome given Japan is a major importer. The bank surmised that the consequences of cost increases caused by the rise in import prices are anticipated to make the annual rate of growth in the CPI relatively high in the near term.
The pace of the rising prices is apparently then anticipated to slow down near the middle of the fiscal year 2023 as a result of a fading of these impacts as well as the effects of the government's economic policies driving down energy costs.
Then, it is anticipated to modestly increase once again as the production gap closes, wage growth accelerates and the impacts of the economic policies that have been used to lower energy costs start to fade by the middle of fiscal 2023.
Wage negotiations could be catalyst for change
The timetable of a withdrawal from Japan's loose monetary policy could depend in large part on impending wage talks.
In March, the shunto wage negotiations will begin. The discussions have significant ramifications for the third largest economy as they unite important unions and the biggest Japanese corporations. During the course of the negotiations, the "Rengo" trade union confederation, which is the biggest in the nation, establishes a particular aim for base-pay increases.
A wage increase of more than 3% might persuade the BoJ that inflation is becoming more entrenched. Given the history of the last 30 years or so, the BoJ is far more worried that inflation will go back down to unattractively low levels again than the majority of its peers. Most major central banks are obviously worried that inflation will get entrenched at levels that are unacceptably high.
Yen down almost 2% after the Bank of Japan’s decision
Since mid-November 2022, the USD/JPY pair has been trading downward, as the greenback has lost momentum after reaching record-high levels not seen in decades at the end of October 2022, when the pair was trading at 151.93 according to ActivTrades’ Forex data.
The currency has lost almost 16% from its highest level and a low level reached at 127.215 a few days ago.
With today’s monetary policy decisions, the Yen plunged by more than 2.5% against the USD during the Asian trading session, heading towards the upper part of the bearish channel.
As "speculators are likely to increase their hawkish bets on a policy shift from the BoJ" according to Anderson Alves - market analyst at ActivTrades, but if the BoJ keeps its monetary policy unchanged, then the Japanese currency is likely to lose ground and experience higher volatility.
After a two-day monetary policy meeting, and in defiance of market predictions, the Bank of Japan (BoJ) kept its ultra-low interest rates and bond yield limit in place on Wednesday 18th January.
The market had expected the BoJ to increase the target rate on 10-year bonds above 0%, increase the range within which rates might depart from the goal by more than 0.5 percentage points, or abandon yield curve control (YCC) completely.
In an effort to demonstrate its determination to continue implementing its YCC policy for the time being, the BoJ amended the rules for a funds-supply market operation on Wednesday to make it possible to use it as a tool to prevent long-term interest rates from rising excessively.
Some experts saw this action by the BoJ as an indication that Governor Haruhiko Kuroda would hold off on making significant policy changes during his tenure, which expires on April 8th, rather than revising its stimulus program.
BoJ confident of economic recovery despite global risks
Even though it is anticipated that Japan's economy will be subject to downward pressure due to high commodity prices and slowdowns in economies outside the country, the bank’s statement said that it is likely that the economy will “recover towards the middle of the projection period.”
The BoJ further implied that this would be because new coronavirus effects are diminishing and supply-side limitations are relaxing. After that, a positive cycle of rising incomes and rising spending is expected to keep Japan's economy growing at a pace above its potential growth rate.
Core consumer prices in Japan's capital, a leading indicator of national trends, increased by 4.0% in December from a year earlier, exceeding the central bank's 2% inflation target for the seventh straight month, according to a report released on the 9th of January.
The ongoing situation in Ukraine and changes in commodity prices, notably grain prices, have been troublesome given Japan is a major importer. The bank surmised that the consequences of cost increases caused by the rise in import prices are anticipated to make the annual rate of growth in the CPI relatively high in the near term.
The pace of the rising prices is apparently then anticipated to slow down near the middle of the fiscal year 2023 as a result of a fading of these impacts as well as the effects of the government's economic policies driving down energy costs.
Then, it is anticipated to modestly increase once again as the production gap closes, wage growth accelerates and the impacts of the economic policies that have been used to lower energy costs start to fade by the middle of fiscal 2023.
Wage negotiations could be catalyst for change
The timetable of a withdrawal from Japan's loose monetary policy could depend in large part on impending wage talks.
In March, the shunto wage negotiations will begin. The discussions have significant ramifications for the third largest economy as they unite important unions and the biggest Japanese corporations. During the course of the negotiations, the "Rengo" trade union confederation, which is the biggest in the nation, establishes a particular aim for base-pay increases.
A wage increase of more than 3% might persuade the BoJ that inflation is becoming more entrenched. Given the history of the last 30 years or so, the BoJ is far more worried that inflation will go back down to unattractively low levels again than the majority of its peers. Most major central banks are obviously worried that inflation will get entrenched at levels that are unacceptably high.
Yen down almost 2% after the Bank of Japan’s decision
Since mid-November 2022, the USD/JPY pair has been trading downward, as the greenback has lost momentum after reaching record-high levels not seen in decades at the end of October 2022, when the pair was trading at 151.93 according to ActivTrades’ Forex data.
The currency has lost almost 16% from its highest level and a low level reached at 127.215 a few days ago.
With today’s monetary policy decisions, the Yen plunged by more than 2.5% against the USD during the Asian trading session, heading towards the upper part of the bearish channel.
As "speculators are likely to increase their hawkish bets on a policy shift from the BoJ" according to Anderson Alves - market analyst at ActivTrades, but if the BoJ keeps its monetary policy unchanged, then the Japanese currency is likely to lose ground and experience higher volatility.
FXIFY Celebrates 1 Year Anniversary: Establishing Itself as an Industry Leader
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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