Boj had an interest rate of 0.50% for a third meeting

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In Japan's Bank, interest rates should be 0.50%interest rates at its May meeting.
The uncertainty of the United States -inspired Trade War is at the heart of the decision.
The Japanese yen may further alleviate BOJ.

The Japanese Bank (BOJ) announces its decision on monetary policy after a two -day meeting on Thursday, and market participants believe that policy makers will keep a comparative interest rate of 0.50%.

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The focus will then be focused on the signs of future monetary policy measures along with fresh economic forecasts, the response of Japanese yen (JPY).

What to expect from the Boj interest rate decision?

As stated, the Japanese central bank is likely to retain interest rates of 0.50%, which is the highest level of 17 years. In January, Boj sent a 25 base point (BPS) hike to achieve his 2% inflation, but remained in Pat in March.

In terms of forecasts, Boj predicted a 1.1% increase in gross domestic product (GDP) in the 2025 financial year and in January 2026. Such a number may suffer in the midst of an ongoing trade war, given that Japan is an export -dependent economy. In addition, the average prospect of consumer inflation was 2.4% and 2% over the same two years.

In the meantime, the United States (US)-inspired trade war continues, creating uncertainty about the development of economic and inflation. Without the progress of the negotiations, Japan is likely to see exports and reduced capital investments with increased inflation. This means that Japanese policy makers are likely to choose tariffs until a clearer picture appears.

Prior to the announcement, Japanese Prime Minister Shigeru Ishiba announced in mid -April to alleviate emergency economic measures to alleviate any impact on the US -affected industries and households. The package includes support for corporate funding and subsidies for lowering gasoline prices by 10 yen ($ 0.07) liters (0.26 gallons) and partly covers electricity bills from July from July.

Japanese Minister of Economic Affairs Ryosei Akazawa, who is responsible for trade negotiations with the US, also reiterated that they would require complete removal of fees. Moreover, he stated that the government did not consider the sacrifice of agricultural products during the negotiations in the interests of cars.

Finally, Boj Governor Kazuo Ueda said last week that the bank closely monitors the economic and price data related to the interest rate policy. Ueda will organize a press conference after the announcement and his words will be checked for future monetary policy decisions.

As a color mark, the US published first -level data on Wednesday. The ADP Employment Amendment Report showed that the private sector added 62,000 new jobs in April, which is much worse than the 108K, which the market participants were expecting. The preliminary assessment of the US Q1 GDP also left expectations, as the economy signed at 0.3% compared to the expected 0.4% expansion. These figures encouraged speculation that the US is in the midst of Trump's tariffs in the near future with a recession and financial markets turned risk -proof before Boj's decision.

How could the Japanese interest rate be affected by USD/JPY?

In general, the central bank decisions markets should be marked, which means that the decision should be limited to the expectations of JPY. It is assumed that policy makers will repeat that they will remain dependent on the data. However, changes to the expectations may be considered by the Japanese currency.

The scenario in which BOJ officials are optimistic about the development of economic and inflation is quite unlikely, but this should result in a safer JPY. Given this, the USD/JPY serves after the BOJ decision.

Fxstreet chief analyst Valeria Bednarik says: “The USD/JPY pair floats in the American session before the BOJ announcement about 143.00, progressing to the second consecutive day, but bullish potential seems very limited. In the daily chart, Barish has 20 simple moving mean (SMA) dynamic dynamic dynamic durability. The 200 SMAS heads lower, far above the current level, reflecting dominant trends.

Bednarik adds: “If Boj should convey the Hawk message, the USD/JPY risk turns to the negative side, with 142.00 immediate support before April 23 is low every day low is 141.35. Additional sales pressure reveals at the lowest level of 139.88.”

Central Bank

Central banks have a major mandate that ensures stability of the state or region. Economics are constantly facing inflation or deflation as the prices of certain goods and services fluctuate. The steady increase in the same goods mean inflation, and the constant lower prices of the same goods mean deflation. The central bank's task is to keep demand in line with its political rate. The largest central banks, such as the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BOE), is a mandate to keep inflation near 2%.

There is one important tool at the disposal of the Central Bank to get inflation higher or lower, which means that the rate of the comparative policy, commonly called interest rate, is adapted. At pre -communication moments, the central bank gives a statement at its political rate and gives additional reasons why it will either remain or change (cutting or hiking). Local banks adjust their savings and loan rates accordingly, which in turn makes it harder or easier or easier to make a loan for people's savings or borrowing and investing in their business. If the central bank hikes interest rates significantly, it is called financial effort. If it reduces its comparative base, it is called financial mitigation.

The central bank is often politically independent. The members of the Central Bank Political Council will pass a series of panels and listening before appointing a political government. Every member of the Management Board often has a certain conviction on how the central bank should control inflation and subsequent monetary policy. Members who want a very loose monetary policy with low interest rates and cheap loans to significantly increase the economy, while it is satisfied with seeing inflation in just over 2%, called pigeons. Members who want to reward the savings and keep inflation all the time are called hawks and do not rest until inflation is or is just under 2%.

Usually there is a chairman or president of each meeting, must create a consensus between Hawks or pigeons, and have its own final word when it falls to a vote exchange to avoid 50-50 tillage, whether current policy should be adjusted. The chairman will have speeches that can often be watched live, which conveys the current financial position and prospect. The central bank tries to move its monetary policy without causing violent impetus, stocks or its currency. All central members of the central bank guide their attitude towards the markets before the event of the political meeting. A few days before the political meeting until the transmission of a new policy, members are prohibited from publicly speaking. This is called a power outage.

Economic indicator

Boj interest rate decision

Its Japanese bank (BOJ) announces its interest rate on the decision of each bank after eight planned annual meetings. In general, when Boj views the prospects of economic inflation and raises interest rates, it is bullish (JPY) for Japanese yen. Also, if Boj has a dovint view of the Japanese economy and keeps interest rates unchanged or cuts, it is usually caraced for JPY.