Analyst: Bank of Japan's decision has a mixed impact on the Japanese Yen, attention shifts to the Federal Reserve
The Bank of Japan's decision has had a mixed impact on the Japanese yen, with the focus shifting to the Federal Reserve. After the Bank of Japan raised interest rates and reduced its bond-buying program, the yen experienced sharp fluctuations. The current focus is on the press conference of Bank of Japan Governor Haruhiko Kuroda and the upcoming policy decisions of the Federal Reserve. Analysts believe that the rate hike decision by the Bank of Japan is unfavorable for the yen, and the market is eager to understand Kuroda's stance. The manager of Rakuten Investment Management believes that if Kuroda indicates that there will be no further rate hikes this year, the yen will continue to weaken
ATFX Markets Chief Market Analyst Nick Twidale said,
The Bank of Japan's reduction in bond purchases disappointed the market, leading investors to start selling the yen. The cut amount was far below expectations, dealing a heavy blow to the yen. We have seen gaps in the rapidly changing market, and considering overnight positions, we may see more gaps in the next few hours.
Royal Bank of Canada Capital Markets Asia Foreign Exchange Strategy Director Alvin T. Tan said,
Considering the expectations before the meeting, I do not think this is favorable for the yen. This decision is usually mixed for Japanese assets, as it is a mix of a 1 trillion yen quantitative tightening relative to market expectations and pricing in a 12 basis point rate hike. In short, the Bank of Japan's decision today did not significantly exceed the market's hawkish expectations for the meeting.
Saxo Capital Markets Foreign Exchange Strategy Director Charu Chanana said, Given the low standards set by the Bank of Japan, this is undoubtedly one of the bank's toughest measures. If the Federal Reserve does not clearly indicate a rate cut in September later today, the yen may continue to be under pressure. The Japanese stock market should be cautious, and banks may be disappointed by the Bank of Japan's slight reduction in bond purchases. However, structural themes in Japan remain interesting, such as themes related to corporate governance reform or geopolitics