The Bank of Japan's decision to raise or maintain the interest rate is a 50/50 affair. ING economists analyze how the BoJ's monetary policy announcement could affect the Japanese Yen (JPY).
The Yen still needs help from the Dollar rates
It will be a binary event for the Yen, as markets are pricing in the implied probability of a rally this week at around 50%-60%. The rate hike is also expected to be accompanied by the end of the yield curve control policy, although the BoJ could keep its bond purchasing program intact to avoid excess volatility in the fixed income market.
A hold should boost USD/JPY, which may cause the pair to test 150.00, while a rise may trigger a correction to levels below 148.00.
Our view remains that USD/JPY will trade lower from Q2 onwards, but that depends on both lower USD rates and a BoJ hike.
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.
