Tomorrow markets are expecting Bank of Japan’s interest rate decision and monetary policy statement, which will keep the Japanese Yen’s movement in check until the decision time.
The world’s third-largest economy central bank is expected to leave its interest rate unchanged at negative 0.1 percent. In the meantime, the currency’s movement has a limited possibility of witnessing any type of high volatile movements as markets have already priced such decision.
Moreover, Bank of Japan is also expected to update its forward guidance for inflation growth projections in light of Friday’s weak inflation data, which showed below than expected growth.
Following Japan’s Prime Minister Shinzo Abe significant win in the Elections, which showed the support for his economic approach that reignited the Japanese economic growth, lead the outlook for the Japanese Yen to turn more dovish in the light of rising expectation of more fiscal stimulus.
On the other hand, there are no expectations favoring a further interest rate cuts in the negative territory as the negative rates’ experiment is slowing down the economy rather than accelerating economic growth.