Yen Steady After Brief Ripples from BoJ, Dollar Softens Mild

Yen Steady After Brief Ripples from BoJ, Dollar Softens Mildly

Yen weakened momentarily after BoJ left monetary policy unchanged as widely expected, but swiftly regained stability. This quick recovery underscores the market's assessment that the conditions for a BoJ rate hike in April remain intact. This viewpoint is bolstered by unchanged CPI core-core forecast, which holds steady at 1.9% for the upcoming two fiscal years. However, BoJ refrained from offering any immediate signals for such a policy shift. The decision on whether to raise interest rates will depend heavily on the outcomes of the Spring wages negotiations, especially in terms of the breadth of wage growth. Given these circumstances, Yen still faces potential downside risks in the near term.

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