Japanese Yen is trading mildly firmer in a tight range today, with investors and traders keenly awaiting BoJ rate decision in the upcoming Asian session. The consensus in the market is that BoJ will maintain its current monetary policy, sticking to the negative interest rate policy. The Yield Curve Control program, a crucial component of Japan's monetary strategy, is also expected to remain unchanged, as the yield curve currently exhibits no signs of distortion.
The Bank of Japan (BoJ) will hold its Monetary Policy Committee (MPC) on Tuesday, January 23 and as we get closer to the Interest Rate Decision, here are the expectations forecast by the economists and researchers of eight major banks.
OECD has suggested that BoJ should consider implementing a gradual rise in short-term interest rates and introduce more flexibility into its Yield Curve Control policy. This recommendation comes at a time when Japan appears to be at a crucial economic juncture, with inflation trends potentially stabilizing around BOJ's 2% target, a goal set in 2013 but not consistently achieved since then.
Dollar saw notable decline against most major currencies, maintaining its softer tone in the Asian trading session today, with the exception of its performance against Yen. This selloff amidst a backdrop of improving risk sentiment, reflected by the uptick in major US stock indexes. Investors' attention is now squarely focused on the forthcoming release of US inflation data for December, which is poised to significantly influence market expectations and monetary policy forecasts.