- GBP/JPY halts winning streak following BoJ interest rate decision release.
- The Bank of Japan decided to keep its current interest rate at 0.15% at its meeting on Friday.
- Policymakers are awaiting UK retail sales data for August to gain further insight into developments in the UK economy.
GBP/JPY snaps its four-day winning streak, trading around 189.00 during the Asian session on Friday. The GBP/JPY pair faces challenges as the Japanese Yen (JPY) gains ground following the Bank of Japan (BoJ) monetary policy decision on Friday, keeping its interest rate at 0.15%, as widely expected.
In addition, Japan’s Consumer Price Index (CPI) rose to 3.0% year-on-year in August, up from 2.8% previously, marking the highest level since October 2023. In addition, the National Core CPI, excluding fresh food, hit a six-month high of 2.8%, rising for the fourth consecutive month and in line with market expectations.
Japanese Finance Minister Shunichi Suzuki said on Friday that he will “continue to monitor and analyze the impact of the latest U.S. rate cut on the Japanese economy and financial markets.” Suzuki added that the Federal Reserve Bank’s (FRB) outlook on the U.S. economy aligns with the Japanese government’s view that the U.S. economy is likely to expand.
In the UK, the Bank of England (BoE) decided to keep its interest rate at 5% on Thursday, as widely anticipated. The BoE had previously signalled the possibility of rate cuts in early summer with a quarter-point reduction at the last meeting, but this move may have been premature.
Policymakers now await further developments in the UK economy before considering further rate adjustments. On Friday, UK retail sales data for August will be closely watched, with the monthly rate expected to ease to 0.4% from 0.5%, while the annualised figure is anticipated to remain stable at 1.4%.
Of the nine members of the Monetary Policy Committee (MPC), BoE external member Swati Dhingra voted to cut interest rates for the second time in a row, while the remaining members supported keeping rates at their current levels. Investors had anticipated that two MPC members would back a dovish policy decision.
Economic indicator
BoJ interest rate decision
He Bank of Japan The Bank of Japan sets the interbank interest rate. This rate affects a range of interest rates set by commercial banks, building societies and other institutions towards their own savers and borrowers. It also affects the price of financial assets such as bonds, stocks and exchange rates, which affect consumer and business demand in a variety of ways. If the Bank of Japan has a firm outlook on the Japanese economy and increases the current interest rate, this is bullish for the yen. Conversely, a dovish outlook that leads the bank to reduce or maintain current rates will be bearish for the yen.
Latest Post:
Fri Sep 20, 2024 02:52
Frequency:
Irregular
Current:
0.15%
Dear:
–
Previous:
0.15%
Fountain:
Bank of Japan
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
