The background to policy moves from the Bank of Japan going into today's meeting was two rate hikes this year:
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March 2024: The BOJ ended its long-standing negative interest rate policy, which had been in place to fight deflation and stimulate economic growth. This move marked the first rate increase in 17 years, signaling a move towards policy normalisation.
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July 2024: The central bank raised its short-term policy interest rate to 0.25%, moving further away from its ultra-loose monetary stance. This change was aimed at balancing economic growth with rising inflationary pressures.
The Bank was expected to hold today, although further increases are expected in 2025.
The decision:
The yen has lost ground, adding to its weakness since the Federal Open Market Committee (FOMC) cut the Federal Reserve but signaled its own halt:
This article was written by Eamonn Sheridan at www.forexlive.com.
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