Counter to the view of the majority of BoJ watchers, the central bank this morning announced a 15-bps rate hike which was decided by a 7-2 majority.
It also announced that its bond buying programme will be reduced by about JPY400 bln each quarter, so that it will be about JPY3 trn in Q1 2026, from around twice that size recently, Rabobank’s senior FX strategist Jane Foley notes. Yen strengthens against the US Dollar “The BoJ’s policy statement includes a fairly optimistic assessment of the Japan ese economic outlook stating that fixed investment is ‘on a moderate increasing trend’ and corporate profits are ‘improving’.
” “While USD/JPY softened on today’s policy announcement, it had rallied earlier in the session on local press reports that a rate hike was being discussed by the BoJ. While USD/JPY is off the day’s lows, it is still holding below yesterday’s opening levels. We have brought forward our previous year end USD/JPY forecast of 152.00 to a 3-month view and have adjusted lower our 1 month forecast.” “The next key focus for USD/JPY is this evening’s Federal Reserve policy announcement.
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