Japanese Yen Weakens as BOJ Maintains Steady Interest Rates

September 23, 2024 at 11:58 am

On Friday, the BOJ maintained its steady interest rates, with Governor Kazuo Ueda noting that the central bank could take time to monitor the effects of global economic uncertainty, indicating no urgency to further raise borrowing costs. This dovish stance led to a drop in the yen, casting doubt on whether the BOJ would hike rates again this year, a move previously anticipated by many in the market. As a result, USDJPY climbed 0.86%, closing at 143.85.

市场热点-內頁一 - Ultima Markets — *USDJPY Daily Price Chart Source Trading View*

(USDJPY Daily Price Chart, Source: Trading View)

Governor Ueda mentioned that Japan’s economic conditions align with forecasts, supported by wage growth that is boosting consumption and helping inflation approach the BOJ’s 2% target. “The global economic outlook remains highly uncertain, with markets continuing to show instability. We must carefully assess these developments for now,” Ueda remarked during a news conference following the BOJ’s widely expected decision to hold short-term rates at 0.25%.

市场热点-內頁二 - Ultima Markets — *BOJ Policy Rate Source Trading View*

(BOJ Policy Rate, Source: Trading View)

The recent rebound in the yen has eased upward pressure on import prices, reducing the risk of domestic inflation overshooting. Meanwhile, Japan’s chief currency official, Atsushi Mimura, stated that authorities are closely monitoring the markets as a resurgence in yen carry trades could increase volatility. He added that most yen carry trades from the past have likely been unwound.

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