The Bank of Japan left the policy settings unchanged. The Yen has weakened following the decision. Economists at TD Securities analyze USD/JPY outlook.
Bboring BoJ meeting with no fireworks
It was a boring BoJ meeting with no fireworks, as all members voted unanimously to leave policy levers unchanged. The statement was also largely similar to July and there was no change in forward guidance.
Ueda's press conference also disappointed JPY bulls and those looking for hints of an exit from YCC/negative rates (including ourselves). He didn't lean against JPY weakness and just reiterated that FX should reflect fundamentals and move in a stable manner. As such the task lies with MoF officials to cap JPY weakness and there is little resistance for USD/JPY to break above 150 given the drift higher in US yields.
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