(Reuters) – The Bank of Japan maintained ultra-low interest rates and dovish policy guidance on Thursday, reassuring markets that it will continue to swim against the tide as global central banks tighten monetary policy to combat soaring inflation.
Here are some analysts’ thoughts on the move and the market reaction:
SHIGETOSHI KAMADA, General Manager, Research Department, Tachibana Securities, Tokyo
“The results were in line with our expectations. It became clearer that the Bank of Japan will remain committed to supporting the economy. JPY fell to 145 JPY against USD JPY wait a while (post announcement). JPY The erratic movement in the Japanese stock market has added uncertainty to the Japanese stock market. Even if some companies benefit from a weaker yen, some companies will suffer from higher costs, so overall this will be a concern.
“Wall Street’s move will remain the main market signal for Japanese stocks for some time. “
HIROAKI MUTO, Economist, Sumitomo Life Insurance Company, Tokyo
“The Bank of Japan realizes that an announcement like this will surely lead to the yen-dollar exchange rate Weak, more than 145.
” Although the statement said “we must be vigilant about the movements of the financial, currency markets”, focusing on h Now that the Bank of Japan has communicated, they do not seem to be seriously considering this. They may think that the Japanese A weakening of the Yuan exceeding the 145 level is not a bad thing and will have a negative impact on the economy.”
Takeshi Minami, Chief Economist, NORINCHUKIN RESEARCH INSTITUTE, TOKYO
“While both U.S. and Japanese monetary policy decisions were in line with expectations, U.S. interest rates actually rose, leading to some weakness in the yen. This trend is likely to continue.
“The difference in the direction of U.S. and Japanese monetary policy leads to a depreciation of the yen…Unless U.S. interest rates peak, there will be no relief under the pressure of a depreciating yen and rising interest rates.
“The Japanese economy is indeed weak… The BOJ is right to maintain the status quo given the risk of rate hikes. The harm that rates are doing to current conditions.”
SAKTIANDI SUPAAT, Regional Head of FX Research and Strategy, Maybank Singapore
“I think 147 the next level is possible. Going forward, I think Japan Yuan weakness is relative to the U.S. dollar, especially when interest rate differentials are one of the main drivers.
“Eventually, intervention may come. If the action goes too fast towards 147 and beyond, I think the intervention layer will come in. Verbal warnings come in, rate checks come in, and the next level is definitely intervention. “
Yasunari Ueno, chief market economist at Mizuho Securities in Tokyo
“The Bank of Japan’s decision may have taken into account the fact that the Fed announced a zero rate hike overnight. 75% caused little reaction in the currency market. As it turns out, the decisions of both central banks are almost all factored into the money markets. “
” We are closely watching Kuroda’s view on the recent sharp weakening of the yen. For the sake of public sentiment, he has recently made fewer claims about any benefit from a weaker yen and a rising cost of living. “
” Kuroda is likely to highlight concerns about the economic impact of a weaker yen, although he will avoid directly commenting on monetary policy that falls under Japan’s jurisdiction. The Ministry of Finance, not the Bank of Japan. ”