Bank of Japan Deputy Governor Shinichi Uchida said on Friday that Japan's economy is experiencing a moderate recovery, though some weaknesses persist.
Key quotes
Japan's economy is experiencing a moderate recovery, though some weaknesses persist.
The underlying inflation rate is gradually rising toward the 2% target.
The Bank of Japan's (BoJ) Japanese government bonds (JGB) holdings continue to provide a strong monetary easing effect.
Won't comment on day-to-day JGB yield levels, moves.
No change to our stance on short-term policy rate, JGB taper despite recent yield moves.
JGB yields fluctuate depending on market views on the economy, prices as well as overseas developments.
Cannot say in advance how the BoJ’s policy would affect direction of moves in JGB yields.
The BoJ guides monetary policy aiming to achieve price stability, not to monetize government debt.
Market reaction
At the time of writing, the USD/JPY pair is trading 0.07% higher on the day to trade at 149.78.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
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 attacks 1.0800 ahead of EU inflation data
EUR/USD is battling 1.0800 in the early European session on Tuesday, undermined by the latest US Dollar bounce. Traders keenly await the EU inflation data and the US jobs survey for further impetus as US President Trump's 'reciprocal tariffs' announcement looms on Wednesday.
GBP/USD treads water above 1.2900 ahead of US data, tariffs
GBP/USD is trading on the defensive while holding above 1.2900 in Tuesday's European trading. The pair loses ground amid a modest US Dollar uptick as traders resort to repositioning in the lead-up to the top-tier US economic data releases and Wednesday's tariffs announcements.
Gold price eases from record high; bullish bias remains amid worries over Trump's tariffs
Gold price retreats slightly after touching a fresh all-time high on Tuesday as bulls pause for a breather and opt to wait for US President Donald Trump's reciprocal tariffs announcement. Adding to this, a positive tone around the Asian equity markets also acts as a headwind for the commodity amid overbought conditions on the daily chart.
PEPE could rally to double digits if it breaks above its key resistance level
Pepe memecoin approaches its descending trendline, trading around $0.000007 on Tuesday; a breakout indicates a bullish move ahead. Moreover, PEPE's long-to-short ratio supports a bullish thesis as bullish bets among the traders reach the highest over a month.
Is the US economy headed for a recession?
Leading economists say a recession is more likely than originally expected. With new tariffs set to be launched on April 2, investors and economists are growing more concerned about an economic slowdown or recession.
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.