The Bank of Japan (BoJ) headquarters in Tokyo, Japan, on Thursday, October 31, 2024. The Bank of Japan kept its benchmark interest unchanged.
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The Japanese central bank held its poll percentage on Thursday at 0.5%, for a second consecutive meeting, as the weight of US President Donald Trump on the prospect of the country’s economy.
The relocation was in accordance with economists who were interviewed by Reuters and comes at a time of altitude trade, since the American countries put pressure to sign business deals under threats of “mutual” rates.
The headline inflation of Japan has remained above the goal of 2% of the BoJ for 36 consecutive months, as a result of which the central bank space has increased the rates, because it strives to normalize its monetary policy on the back of a virtuous cycle of wages and price growth. However, Trump rates have complicated plans to increase rates.
In its policy decision, the Central Bank emphasizes that he will continue to increase its policy “if our economic and prize comfortes are being realized.”
It also marked that Japan’s growth is likely to be moderate due to a slick in other economies and a decrease in domestic business profits.
In the meantime, the Central Bank expects an infaction to vary between 2-2.5% in the tax year 2025 and 1.5 to 2% in the tax year 2026. CPI will probably be around 2% in the tax year 2027.
The tax year of Japan is from April to March. The country is planned for tax release first quarter of GDP numbers on 16 May.
The Japanese economy grew 1.2% on an annual basis in the fourth quarter, while the growth of the entire year in 2024 delayed to 0.1%, a sharp decrease compared to the 1.5% growth in 2023.
Boj’s last decision comes after trading discussions between Washington and Tokyo did not report two weeks of August, did not lead to a breakthrough.
The Nikkei 225 rose by 0.54% at 12.30 pm Japanese times after the decision, while the wide topix index added 0.23%.
In the meantime, the Yen weakened 0.29% to act at 143.49 against the US dollar.
USD/JPY
Japan’s currency has been for an important trade in trade after the US President Donald Trump said last Thursday that Japan would “always fight” to keep the yen weak. Last year, Japan ran from his ultra-Lose monetary policy to increasing the rates, a movement that strengthened its currency against the dollar.
Since March 18, 2024 – when Japan left his negative interest rate Poly – the yen has rated almost 3% against the US dollar. The East Asian currency has since taken the office on January 20, the Yen has won more than 7% against the Greenback.
On Saturday, the Japanese Minister of Finance Katsunobu Kato denied a Yomiuri report that said Minister of Treasury Scott Bervent had told him that a “weak dollars and a strong yen are aired table.” “Secretary Bavens Never I mentioned anything about exchange rates or a framework for managing them,” said Kato in a post on X.
Citi Research said in a note last week that, while trade interviews with the US had seen ‘relatively smooth progress’, the export to the US will be under pressure considering a mutual rate of 10% and a car rate of 25%.
“Also, [Japan] Economy can be heavier influenced through the world economy, in particular China. We assume that hard data will start showing a fall-off in Japanese exports to slow down in Usumer expenditure and employment. “
If that happens, Citi said that the BoJ will see a Dovish -Tilt in its communication and pay attention to trade developments, such as rates about China.
A comment from Nomura predicted that the central bank will seduce its ‘tariff walk strong’, although the company sees little need to hurry to hk -interest rates, given the growing downward risks for the economy of US tariff policies.
Nomura You have not projected for the next tariff increase, while Citi predicts that it will happen March 2026.
