PT Solid Gold Berjangka | Fragile Yen Could Make BOJ’s Ueda Tilt More Towards Hawkish Stance
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Solid Gold Berjangka | It seems like the Bank of Japan (BOJ) is facing a challenging situation with the yen’s decline to fresh lows. Governor Kazuo Ueda must carefully navigate monetary policy to avoid destabilizing the currency while also considering Japan’s fragile economic conditions. The memory of the 2022 episode, when dovish remarks led to a sharp yen plunge and subsequent intervention, looms large.
Ueda has hinted at the possibility of rate hikes later this year, but such indications have had little effect on halting the yen’s downward trajectory. Despite efforts by Japanese authorities to verbally intervene in the currency markets, the yen continues to weaken, with the dollar surpassing the 155-yen mark, a level that signals a heightened risk of intervention.
The upcoming BOJ meeting is expected to maintain interest rates at current levels, with inflation projections hovering around the 2% target. However, market attention is focused on whether Ueda will adopt a more hawkish stance regarding the possibility of near-term rate hikes.
Overall, Ueda faces the delicate task of balancing monetary policy to support Japan’s economy while preventing excessive yen depreciation that could trigger intervention measures.