Japan still needs inflation.

Bank of Japan (BOJ) Governor Kazuo Ueda has stressed the need to continue ultra-accommodative monetary policy for now. But it signaled the possibility of a rate hike. if inflation and higher wages than expected

He said tightening monetary policy now could lead to lower inflation in the future. which is already slowing down Because the cost of imports reached its peak. which is a sign that He is in no hurry to raise interest rates. “We may see lower-than-expected inflation again. which would be very worrisome But if wages and inflation accelerate faster than expected And support tightening monetary policy, the BOJ is ready to deal with raising interest rates.”

It was announced that Japan's Core Consumer Index (CPI) remained flat in March from the previous month at 3.1%, although the figure is lower than the 40-year high seen earlier this year. But it shows that inflation remains above the BOJ's annual target of 2%. Other economic indicators for Japan include manufacturing and services. The numbers came out less than expected in April.

This could be a key factor in Japan's central bank taking a particularly tight policy this year. The Bank of Japan may be starting to think about rethinking the impact of long-term monetary easing. This will be a topic of discussion at the upcoming policy meeting, but it may not be an immediate policy change. Instead, it focuses on structural factors.

The Sankei newspaper reported on Sunday that the BOJ may start discussing its policy review on Friday. It will be the first meeting to be chaired by Kazuo Ueda. It may be a good idea to conduct a comprehensive review of the BOJ's monetary policy dating back to its protracted battle with deflation decades ago. last year

At its meeting this week, the BOJ is expected to maintain its targets under yield curve control (YCC), which recommends a short-term interest rate of -0.1% and the 10-year Treasury yield around 0%.

Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities, said: "If Ueda acts swiftly in conducting its review of past policies, it could be a daunting prospect. That may reflect the BOJ's reluctance to carry out the next major stimulus.”

The Dollar Index (DXY) is expected to rise for the first time in six weeks. With some Fed officials calling for a rate hike this year, Philadelphia Fed President Patrick Harker recently warned on Thursday that U.S. interest rates could rise. It tends to go up further and will last longer. Although economic activity has eased.

Technical analysis data (5H)

Resistance: 134.59, 134.71, 134.97

Support: 134.20, 133.95, 133.82

Source: Investing.com

 

Pivot Points April 25, 2023 05:34 PM GMT+7