Brown Brothers Harriman’s Elias Haddad highlights the USD/JPY’s muted reaction to the BOJ’s 25 basis point hike to 1.00%, even though JGB yields are weaker and the BoJ maintains its tightening stance and action plan to curb JGB issuance. The bank notes that lower oil prices are reducing pressure on the Japanese yen and could assist push the USD/JPY pair towards 155.00.
The BoJ is tightening policy, but the yen’s growth is confined
“The market reaction to the BOJ (Bank of Japan) policy decision was relatively muted.”
“USD/JPY traded in a 10-pip range around 160.20, with TOPIX up about 0.5%. 10-year JGBs generally underperformed, with yields rising as much as 6 basis points.”
“As widely expected, the BOJ increased interest rates by 25 basis points to 1.00%, ending a holding streak that began after the December rate hike.”
“BoJ maintained its tightening stance.”
“Bottom line: Fall in crude oil prices takes pressure off JPY and could help push USD/JPY down to 155.00.”
(This article was created with the assist of an artificial intelligence tool and has been reviewed by an editor.)
