BoJ avoids surprising the market in September – Commerzbank
20.09.2024, 11:00

BoJ avoids surprising the market in September – Commerzbank

The Bank of Japan avoided another market surprise at its September meeting, following economists' and markets' expectations, leaving the key rate unchanged, Commerzbank’s FX Analyst Volkmar Baur notes.

BoJ intends to maintain its hawkish tone

“Although Governor Ueda will not speak to the press until 7:30 (UTC+1), the statement already indicated that the BoJ intends to maintain its hawkish tone and continue to raise interest rates. This is based on a positive economic outlook, with the economy expected to grow above potential in the coming quarters and an improvement in consumer spending and inflation expectations.”

“The Bank of Japan believes that inflation will continue to rise gradually, paving the way for further hikes. What is striking, however, is the lack of explicit forward guidance in today's statement. This confirms our view that the situation in Japan is not quite as clear-cut as the Bank of Japan would sometimes like us to believe. A look at today's inflation figures also supports this view.”

“We continue to believe that the Bank of Japan will find it difficult to raise interest rates significantly and expect only one more rate hike in December, which will lead to a weaker JPY in the coming months.”

 

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