Investing.com – Due to the decision of the Japanese monetary authority to maintain interest rates at 0.10%, after previously abandoning the ultra-loose policy with negative rates, due to the later-than-expected end of bond purchases, there is a belief that the yen will weaken, he noted Julius Baer in a note on Friday. The forecast assumes a devaluation to 160 from the current 157.46.
“Bond purchases will now be carefully phased out and will only start in July. The end of bond purchases later than expected and unchanged interest rates disappointed and weakened the yen,” the Swiss group said.
David Kohl, chief economist at Julius Baer, says details on phasing out bond purchases are not expected until the next meeting, which would disappoint investors.
“Policy tightening at the next meeting is now very likely, but will most likely be implemented cautiously,” adds Kohl, who forecasts an interest rate hike of ten basis points in July.
- How to invest in an uncertain scenario? Learn how to take advantage of market trends with InvestingPro’s handpicked stocks. Increase your returns with portfolios that outperform market indices. Use BEPRO coupon to get extra discount.
