Expected, Bank Of Japan kept its monetary policy unchanged

After the two-day meeting of the Japanese Central Bank, the members decided to leave the monetary policy unchanged, as most traders and investors expected. In a statement after its two-day meeting, Bank Of Japan said it would keep its deposit rate unchanged at -0.1%, while the return on 10-year bond yields would be around 0%.

The central bank earlier this month announced it has slightly reduced purchases of long-term Japanese government bonds, which has led to speculation that the institution will be the last to follow the steps of global central banks in tightening policy.

However, given inflation, which remains well below the desired 2%, normalization of monetary policy remains behind the Japanese central bankers.

JPY appreciated slightly against the dollar, with USD/JPY initially marking 42 pips down, but then returned 50% of the move.

Given the weakness of the USD caused by the uncertainty surrounding the US government, we expect the USD/JPY downward trend to remain.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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