The Bank of Japan's September meeting's summary of opinions states that Japan's core consumer inflation is likely to accelerate toward the year-end with a narrow pace of increase thereafter.
Key notes
- Expect wide range of goods to see price rises ahead.
- Challenges remain to achieve boj's 2% inflation target as yet to confirm japan will see sustained wage rises.
- We must be humble, carefully scrutinise without any preset idea risk japan's inflation may sharply overshoot expectations including via fx moves.
- We must scrutinise wage moves, mechanism behind japan's price moves as existing indicators swayed largely by import price moves.
- There is chance japan will see high wage growth given tight labour market.
- Pandemic-relief programme ought to be phased out as japan only half-way in seeing end to pandemic
- BoJ must maintain easy policy as output gap remains negative, even though there is significant risk inflation may overshoot expectations.
- BoJ must maintain current monetary easing until inflation stably exceeds 2%, driven by rise in trend such as services prices.
- No immediate need to change monetary policy guidance now as we are in a phase where close scrutiny needed on whether japan will see positive cycle of wage, prices.
- Some point to interest rate divergence as factors driving yen declines.
- Desirable to maintain current foward guidance with dovish bias as impact of pandemic uncertain, inflation likely to slow next fiscal year and onward
- When right timing comes, important to have appropriate communication with market on exit strategy from easy policy.
USD/JPY under pressure
Meanwhile, financial markets have been in turmoil which has been playing into the hands of the US dollar. With that being said, bears are moving into USD/JPY as follows:
144.60/70 is the support structure and a close below here on an hourly basis could be significant and open the way for a run on liquidity below 144 the figure.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends gains beyond 1.1400 amid renewed USD weakness Premium
EUR/USD extended gains beyond 1.1400 as the US Dollar (USD) fell alongside Wall Street. Business confidence continues to deteriorate amid mounting concerns about a global economic setback. First-tier data later scheduled for later this week could be a make it or break it.
GBP/USD gathers bullish momentum, advances beyond 1.3400
GBP/USD extends its daily climb above the 1.3400 mark in the second half of the day on Monday. Renewed US Dollar weakness amid a lack of fresh developments hinting at a further de-escalation of the US-China trade conflict support the pair ahead of this week's critical data releases.
Gold rebounds above $3,300 as mood sours Premium
Following a bearish opening to the week, Gold gains traction and trades above $3,300 in the American session. Mixed headlines on the ongoing US-China trade war cause markets to remain risk-averse on Monday, allowing XAU/USD to turn north.
XRP extends gains ahead of futures ETFs launch this week
XRP climbs over 3% on Monday, hovering around $2.33 at the time of writing. The rally is likely catalyzed by key market movers like XRP futures Exchange Traded Funds (ETFs) approval by the US financial regulator, the Securities and Exchange Commission (SEC), and a bullish outlook.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.