Analysis:Bank of Japan may be less dovish than markets think

The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan March 18, 2024. REUTERS/Kim Kyung-Hoon/File Photo

Despite the rate hike, the yen has tumbled more than 1 per cent since the policy pivot, as markets' dovish reading of the BOJ's communication reinforced expectations that another rate hike would be some time off. "The BOJ has made no commitment about the future rate hike pace," a source familiar with the bank's thinking said on the March statement, a view echoed by another source.

The new approach to communication aligns the BOJ with other major central banks, including the Federal Reserve, which ditched rigid forward guidance in favour of a more discretionary approach as they hiked rates aggressively to combat soaring inflation. The remarks heighten the importance of the BOJ's fresh quarterly growth and inflation forecasts due at its next policy meeting on April 25-26, which for the first time will include projections for fiscal 2026.

Some analysts see the weak yen as a potential trigger for further rate hikes, as the currency's renewed declines could push up raw material import costs again.

Source: Financial Digest (financialdigest.net)

Singapore Latest News, Singapore Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Analysis:The great central bank policy reversal kicks offFRANKFURT/WASHINGTON : The world's biggest central banks are on the starting line of reversing a record string of interest rate hikes but the way down for borrowing costs will look very different from the way up.There will be no floodgates or fireworks.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Pretty in pink: Tokyo leads Japan as sakura flowers blossom earlier than beforeThis comes as Tokyo suffers the double whammy of warmer temperatures and the “heat island effect”.
Source: The Straits Times - 🏆 8. / 63 Read more »

Tokyo expected to be mainland Japan’s earliest bloomer in sakura seasonThis comes as Tokyo suffers the double whammy of warmer temperatures and the “heat island effect”.
Source: straits_times - 🏆 5. / 69 Read more »

Bank of Japan ends negative rates, closing era of radical policyThe move is Japan’s first interest rate hike in 17 years.
Source: The Straits Times - 🏆 8. / 63 Read more »

Bank of Japan scraps radical policy, makes first rate hike in 17 yearsTOKYO: The Bank of Japan (BOJ) ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday (Mar 19), making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Bank of Japan ends negative rates, closing era of radical policyTOKYO: The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday (Mar 19), making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »