[Tokyo, 21st, Archyde.com]–The Bank of Japan’s governor, Haruhiko Kuroda, said at a meeting after the monetary policy decision meeting on the 21st that he would implement monetary policy with the aim of achieving sustainable and stable price stability targets. There is no change. “
We asked market participants for their views.
● No new clues, interest in ECB
Governor Kuroda emphasized maintaining the status quo of monetary policy, and his stance did not change as foreign central banks such as the US Federal Reserve (FRB) and the European Central Bank (ECB) raised interest rates. Interest rate differentials are also affecting foreign exchange rates, and even if the Bank of Japan turns to raising interest rates while overseas interest rates are rising, the depreciation of the yen will not be significantly resolved.
There was no new story that could be a clue in the yen bond market after tomorrow.
Interest rates in the medium- to long-term zone will not change significantly from current levels as limit operations continue to take place. I have always thought that the ultra-long-term zone will move a little due to the influence of overseas interest rates, but this has not changed since today’s decision-making meeting and the president’s meeting.
For the foreseeable future, tonight’s ECB board will once be the focus of the market. Interest rates in Europe and the United States move depending on whether the rate hike is 25 basis points (bp) or 50 bp, and the effect is expected to spread to domestic interest rates to some extent, but the impact on interest rates in the medium- to long-term zone is still limited. It will be the target.
● Continued easing gives a sense of security to the market
There was no big surprise. The conventional view that it is not considering raising interest rates to curb the depreciation of the yen indicated that the basic route would be to continue easing.
Since some stock markets have been wary of easing revisions, the fact that the continuation of easing could be confirmed again at the president’s press conference may lead to a certain sense of security for the market. However, it is possible that the speculation of easing and amendment will increase again around the beginning of the year when interest in the personnel affairs of the next BOJ Governor and Vice-Governor will increase.
The Nikkei average rose due to the BOJ’s easing and maintenance, but since it rose sharply in a short period of time before the announcement of financial results began in earnest, it is necessary to pay attention to the risk of a rebound in the near future.
● Maintaining the traditional stance, focusing on a shift in the dollar’s appreciation trend
Haruhiko Kuroda, the governor of the Bank of Japan, said, “The current depreciation of the yen is the dollar’s self-reliance, and it is highly unlikely that the yen will stop depreciating if interest rates are raised a little.” The reason for the yen’s depreciation was the gap in monetary policy with other major central banks, but at present, even if the BOJ makes minor monetary policy revisions, the yen is clearly appreciating against the dollar / yen. When it comes to movement, it’s not. He repeated the traditional stance of not fundamentally changing monetary policy with respect to foreign exchange.
Regarding future dollar / yen trends, the biggest theme is when the trend of dollar appreciation centered on inflation and economic trends will change, rather than the BOJ’s monetary easing stance moving on the ground. If inflation rises and recession concerns grow, the dollar will continue to rise. Unless there is a change in the future, it will be difficult for the yen to appreciate.
However, we do not expect the yen to depreciate in one direction, and the dollar / yen pair is expected to rise to around 140 yen. Inflation in the United States, which has remained high, may once show signs of peaking out. At the same time, if recession concerns grow, both the dollar and the yen are likely to be bought. Even if inflation rises, the dollar’s appreciation pressure is likely to stop as the US rate hike is approaching the mid-3% level towards the end of the year, as the Fed’s views and markets have factored in.