empty
02.11.2022 11:34 PM
JPYUSD: Is the era of ultra-low rates coming to an end?

The markets are deluded in the mad hope that there is a possibility of adjusting the bank's policy on controlling the yield curve (YCC) in the future. The reason was the words of Bank of Japan Governor Haruhiko Kuroda that this is a likely scenario if inflation continues to grow.

JPYUSD: Is the era of ultra-low rates coming to an end?

This image is no longer relevant

However, in my opinion, it is much more important that he sees no reason to change interest rates, he admitted at a meeting of parliament, again emphasizing the importance of maintaining a super-loose monetary policy.

The BOJ remains an exception to the global wave of central bank tightening as it focuses on rebuilding a fragile economy with aggressive stimulus.

With the markets in a persistent bearish trend, this leads me to believe that his words are just diplomatic ripples in the water.

Thus, Kuroda stressed that if Japan sees the prospect of inflation reaching 2%, accompanied by an increase in wages, then, of course, an adjustment in monetary policy will be required. Such indicators in the current and next year are absolutely unrealistic, which means that the old financial wolf is simply leading us by the nose, leaving room for maneuvers in the future.

Under the YCC, the BOJ is aiming for short-term interest rates at -0.1% and also near zero 10-year bond yields as part of efforts to sustain inflation to a 2% target.

In the meantime, the BOJ's relentless defense of the 10-year yield cap has led to a significant distortion in the shape of the yield curve, which has come under upward pressure from rising global interest rates. The gap was palpable.

We note that Japan's core consumer inflation accelerated to a new eight-year high of 3.0% in September, while the yen's fall to a 32-year low is pushing up the cost of imports.

Will such a situation cast doubt on the central bank's resolve to maintain its ultra-loose policy?

To begin with, rising inflationary pressures were the focus of the BOJ's September interest rate hike. Some board members specifically pointed out that corporate pricing behavior could change as more companies raise prices. Obviously, they are unhappy with Kuroda's course, and are trying to push Japan to follow the US Federal Reserve.

In their usual over-polite manner, the members of the board present at the meeting spoke one by one in favor of the BOJ announcing a change of course "at the right time." Agree, this is not a high pressure that Kuroda could withstand.

There are also a huge number of people all over Japan who support the opinion of the Ministry of Finance and are hungry for higher rates.

For example, former BOJ board member Makoto Sakurai, who is a close associate of Kuroda, said the central bank may adjust its yield targets next year if the economy maintains robust growth.

Echoing his associate, Sakurai believes that if Japan can achieve economic growth of around 1.5-2% next year, the BOJ could make small adjustments to control the yield curve. This is an extremely streamlined formulation, and I see no reason to change the policy when sustainable indicators are achieved.

Still, Kuroda's words at the briefing were taken as a dove signal. Hardly a warm hint from the lips of Kuroda himself was taken for a steadfast promise. So it is likely to support market expectations for a change in the central bank's ultra-low interest rates when its second five-year term ends next April.

In addition, the words of the head of the BOJ led to a sharp decline in the yen, which later prompted the government to intervene in the foreign exchange market to support the yen. The currency weakened sharply against the dollar as markets focused on the discrepancy between the BOJ's ultra-soft policy and US interest rate hikes.

This only confirms the idea that traders, often wishful thinking, are becoming disillusioned with the markets in the future. Whereas you always need to look at the background of the process, evaluating it from many positions. In this situation, the human factor played, although there are too few grounds for this. Kuroda is clearly trying to sweep the dollar from the first place, and so far does not intend to retreat from his idea.

Egor Danilov,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Egor Danilov
Start trade
通过InstaForex赚取加密货币汇率变动的收益。
下载MetaTrader 4并开启您的第一笔交易。
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

推荐文章

歐元/美元總覽 – 8月7日:特朗普發動新一輪貿易戰升級

週三,歐元/美元貨幣對大部分時間的波動性非常低。本週確實幾乎沒有宏觀經濟事件,但同時也不能說沒有任何新聞背景。

Paolo Greco 03:59 2025-08-07 UTC+2

路透社:對美元的信任將只會下降

國際新聞機構路透社調查了貨幣策略師,以了解美國美元的未來走勢。根據調查顯示,即使不是大銀行的策略師,也可以得出一個明顯的結論。

Chin Zhao 00:48 2025-08-07 UTC+2

英鎊/美元。英格蘭銀行八月會議:預覽

在8月7日星期四,英格蘭銀行將召開其下次會議。根據大多數分析師的預測,中央銀行將下調利率25個基點,使其降至4.0%。

Irina Manzenko 00:48 2025-08-07 UTC+2

美元 —— 香蕉共和國的貨幣

美國正逐漸變成一個香蕉共和國——一個極不穩定的政治實體,其命運往往取決於單一產品的出口,通常是香蕉。Donald Trump竭盡全力將製造業遷回美國,但這樣做卻剝奪了美國人的多樣性。

Marek Petkovich 00:47 2025-08-07 UTC+2

美元/日元 – 分析及預測

今天,該貨幣對正試圖反彈,但截至目前未能成功。 週三公布的日本數據顯示,6月份名義工資同比增長2.5%,是過去四個月以來最快的增長速度,儘管低於市場預期。

Irina Yanina 17:50 2025-08-06 UTC+2

USD/CAD – 分析與預測

今日,USD/CAD貨幣對繼續保持防禦走勢,持續承受壓力。 由於市場普遍預期美聯儲將在9月份重新開始降息周期,美元依然難以吸引到有意義的買入興趣。

Irina Yanina 17:46 2025-08-06 UTC+2

德國工業部門持續發出令人擔憂的信號

由於數據顯示德國工業訂單在6月份意外下降,歐元略微下跌,即便歐洲與美國之間貿易協定的結果仍不確定。這標誌著連續第二個月的下降。

Jakub Novak 17:33 2025-08-06 UTC+2

特朗普再次撼動市場

週二,隨著美國總統唐納·川普宣布計劃提高對從俄羅斯購買能源資源國家的關稅後,美元兌一系列風險資產的匯率略微走弱。他還表示,將在下週內引入對半導體和藥品進口的關稅。

Jakub Novak 17:27 2025-08-06 UTC+2

特朗普再度讓市場陷入混亂(歐元/美元和英鎊/美元可能出現局部上漲)

美國在貿易戰中的活動重新升溫——這次美國總統的親自介入——已經顯著增加了金融市場的波動性。美國內部愈演愈烈的政治鬥爭正在推動唐納德·特朗普展示一些可以在中期國會選舉前向選民展現的具體成果。

Pati Gani 10:09 2025-08-06 UTC+2

市場下滑,逢低買入徒勞無功

停滯性通貨膨脹的陰影再次籠罩金融市場。ISM服務業就業指數在過去六個月中第五次下降,而價格指數飆升至自2022年以來的最高水平。

Marek Petkovich 09:10 2025-08-06 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.