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On Friday, the Deputy Governor of the Bank of Japan Bank, Shinichi Ochida, said that the central bank will raise interest rates if the basic inflation increases against the background of continuous improvements in the economy.
Main quotes
It will raise interest rates if the basic inflation increases against the background of continuous improvements in the economy.
We will examine, without any idea in advance, whether the economic prices that were placed in our separate report.
We will scrutinize every economic meeting, developments and risks, including the impact of American definitions.
Trump’s tariff is likely to put down descending pressure on Japan and global economies.
There is a lot of bullish trend, negative effects on prices that can come from Trump’s tariff,
Trump’s tariff may lead to low prices if they cool the economy, but prices may rise by affecting global supply chains.
Trump’s tariff can affect prices across the market and foreign currency movements.
Market reaction
At the time of the press, the US dollar pair/JPY rises by 0.08 % a day for trading at 146.19.
Common questions between the Bank of Japan
Japan Bank is the Japanese Central Bank, which sets the monetary policy in the country. Its mandate is to issue banknotes, currency implementation and monetary control to ensure price stability, which means the purpose of inflation is about 2 %.
The Bank of Japan began a very monetary policy in 2013 to stimulate the economy and enlarge fuel in a low -inflation environment. The bank’s policy depends on quantitative and qualitative mitigation, or print notes to buy assets such as government bonds or companies to provide liquidity. In 2016, the bank doubled its strategy and increased the policy of alleviating it by introducing negative interest rates first, and then directly controls the return of its government bonds for 10 years. In March 2024, BOJ raised interest rates, and effectively retreated from the high -drawing monetary policy position.
The massive incentive of the bank caused a decrease in its decrease against its main peers. This process was exacerbated in 2022 and 2023 due to the increased difference of policy between the Bank of Japan and other major central banks, which chose to increase interest rates sharply to fight high inflation levels. BOJ policy has expanded teams with other currencies, which pulled the yen value. This trend was partially reflected in 2024, when BOJ decided to give up the position of the superior policy.
The weakest yen and the increase in global energy prices increased Japanese inflation, which exceeded the BOJ goal by 2 %. The possibility of high salaries in the country – a major element in inflation in feeding – also contributed to this step.
