ADJUSTMENT OF JAPANESE MONETARY POLICY REMAINS A RESIDUAL RISK FOR THE YEN – COMMERZBANK
The Bank of Japan (BoJ) will announce the result of its monetary policy meeting tomorrow. Economists at Commerzbank analyze Yen outlook.
Non-event with residual risk
Tomorrow’s BoJ decision is likely to be a non-event for the Yen.
However, as long as inflation does not settle close to or below the inflation target larger JPY moves cannot be excluded in the future if the BoJ either tightens its monetary policy in view of a further rise in inflation or postpones such tightening measures despite escalating inflation which would sooner or later result in a loss of purchasing power and concerns about the long-term fiscal stability putting pressure on the JPY.
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