(Reuters) – The Bank of Japan (BOJ) on Friday kept monetary settings unchanged, but revamped its guidance on the future path of policy, and decided to conduct a “broad-perspective” review of its monetary policy.
As widely expected, the BOJ kept intact its short-term interest rate target at -0.1% and that for the 10-year bond yield around 0% at the two-day meeting that ended on Friday.
MARKET REACTION:
The yen fell about 0.6% to a one-week low of 134.87 per dollar, while Japanese government bonds and the Nikkei share average rallied.
Here are some comments from experts:
CHARU CHANANA, MARKET STRATEGIST, SAXO MARKETS, SINGAPORE
“The wait for the announcement sparked quite a bit of volatility in the yen and rising expectations that we will get a tweak. But eventually, even their (BOJ) announcement of a policy review came with a 1-1.5-year timespan, which was longer than what market expected (tweaks by July) even as inflation forecasts were raised across the board. Looks like Japanese yen would go back to being a Treasury yield story for now.”
CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE
“The policy review is in line with our expectations for policy assessment. We still look for a removal of YCC regime, interest rate hike at some stage this year amid broadening inflationary pressures (Tokyo core CPI rose to another record high) and upward pressure on wage growth in Japan.”
(Reporting by Asian bureaus; Editing by Sherry Jacob-Phillips)
