2024-07-29 23:04:00
governor Bank of Japan, Kazuo UedaInvestors will be on high alert on Wednesday when it lays out detailed plans Quantitative tightening after years of massive easing. Additionally, it may increase interest rate.
Although only 30% of analysts Bank of Japan According to a Bloomberg survey, forecast growth as a base assumption, and few have ruled it out. High levels of uncertainty have caused the yen and Japanese stocks to experience a roller-coaster ride that is likely to continue leading up to and beyond the decision.
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Bank of Japan faces big decision
some officials Bank of Japan People familiar with the matter said they are open to the idea of raising interest rates this month if inflation remains in line with expectations. Others believe the central bank can remain calm while waiting for more data, hoping to see signs of a recovery in consumer spending.
All of this points to an unusually tense meeting in which the governor may end up exercising his will to set the course for monetary policy. The outcome will have an impact on world markets, with the yen at a turning point It could extend this month’s remarkable rally or fall back to multi-decade lows.
this Fed It comes just hours after the Bank of Japan meets, and its signals on U.S. interest rates can greatly amplify market moves that begin during Asian trading, or quickly reverse them.
s price swap market Earlier on Monday, they said there was a 50% chance of a 15 basis point rate hike by July 31, up from 25% a week ago.
China unexpectedly cuts one-year interest rates
Another important event at this meeting will be the announcement of the first bond reduction plan. After more than a decade of large-scale monetary easing programs finally ended in March, the central bank will embark on the path of quantitative tightening.
agency officials Bank of Japan has no intention of surprising market participants by cutting bond purchases, and they know exactly what to expect. The market generally believes that starting next month, the monthly bond buying pace will initially slow to 5 trillion yen (about 32 billion U.S. dollars) from the current 6 trillion yen, and eventually be halved within two years.
The direction of the yen following the BOJ’s decision is another major factor the bank may consider, especially after the Ministry of Finance suspected currency intervention this month.
The yen has been volatile, rising from a 38-year low to a two-month high in a month as traders unwind positions focused on interest rate differentials between Japan and the United States.
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