The Japanese currency climbed out of a five-month low against the American dollar during the Bank of Japan’s report on December’s policy minutes released in the market. The report pointed out raising confidence among certain policymakers about raising interest rates, and at the same time, the central bank also signalled towards cutting back on its monthly bond buying.
(USDJPY Daily Price Chart, Source: Trading View)
In this month’s meeting, the BOJ kept the interest rate at 0.25%, the Governor of the BOJ Kazuo Ueda explained that they would be looking at the effects of wage increase over the coming 12 months and require clarity over the US administration’s economic policy before making any drastic alterations. However, some Bank of Japan’s officials were upbeat that the circumstances might be right for a rate rise in the foreseeable future, with one member being hopeful of such a development very soon keeping the January rise possibility back on the table.
The Bank of Japan scheduled to begin in January, is expected to scale down its monthly buying of Japanese government bonds to the tune of 410 billion yen or $ 2.6 billion thereby making it approximately 4.5 trillion yen a month. A downward trend has been noted for the yen because of the increase in U. S. Treasury yields, although the Federal Reserve did lower the rates by 100 basis points.
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