The Bank of Japan (BOJ) will upload 25 basic points in the fourth quarter due to concerns about the boost of growth. The failure of the USD/JPY to break below 142.00 on multiple occasions since May increases the risk of a Squeeze Short. The BOJ will continue with the quantitative reduction (QT) in 400,000 million JPY per quarter from April 2026. There are other permutations, such as staggering or slowing down the rhythm of QT between 200,000 and 300,000 million JPY, Standard Chartered economists report, Chong Hoon Park and Nicholas Chia.
Adjust in one way or another
“Now we expect the BOJ to maintain the policy rate at 0.50%on June 17 and rise 25 basic points in the fourth quarter of 2025 (to 0.75%) and in the second quarter of 2026 (to 1.00%), compared to our previous call of rates of 25 basic points in June and the fourth quarter. The recent data stresses that the economy is still strong enough to Absorbing an additional adjustment.
“With the consumption weakening and the winds against external intensifying, now we believe that the BOJ will expect more clear evidence that the increase in wages translates into a real expense. We expect the next rise in rates in the fourth quarter, assuming a better visibility on domestic demand, the transmission of wages and the resolution of the uncertainty about the commercial policy of the US.
“The USD/JPY failure to break below 142 on multiple occasions has increased the risk of a Squeeze shorts in the torque. Regarding the quantitative reduction (QT), our baseline is that the BOJ maintain the trimming of bonds by 400,000 million JPY per quarter from April 2026, although there are other permutations, such as reducing the rhythm of the rhythm of the bond Millions of JPY.
Source: Fx Street
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