Earlier today in the Asian session, Bank of Japan, as expected, kept its key short-term interest rate intact at the 0.5% level, at its highest levels since 2008, and noted that the return towards looser financial conditions is currently not appropriate, signaling that rates will most likely remain at this level for a prolonged period of time.
The Governor of the central bank Kazuo Ueda highlighted that the board is monitoring closely the international state of trade affairs and the expected impact that they may have on economic conditions, noting the possibility for additional rate hikes is an option for the bank and restrictive policy actions may be deployed if the data warrants it.
The bank has announced the tapering of the JGB purchases starting in 2026, of which the central bank is purchasing around 50% of sending 10-year yield higher.
The Japanese Yen was virtually unchanged post the decision, since the event was in line with expectations, but Japanese indices Nikkei225 and Topix fell in the reds from expectations that the central bank will keep interest rates unchanged for longer.
Technical Analysis
USDJPY Chart – The Yen remains directionless post BoJ’s decision, attempts consolidation near 144 area
Resistance: 146.60 (R1), 148.80 (R2), 151.30 (R3)
Support: 142.40 (S1), 140.00 (S2), 137.70 (S3)