During the Asian session on Thursday, Bank of Japan (BoJ) board member Naoki Tamura made comments indicating that the journey towards ending the easy policy is still far from over.
Key Quotes:
- Japan’s neutral rate is likely to be around 1% at the minimum.
- Will carefully examine the pros and cons of exiting easy policy.
Market Reaction:
The hawkish remarks reinforce market expectations for another interest rate hike by the BoJ in 2024, providing some strength to the Japanese Yen (JPY) and limiting the recovery of the USD/JPY pair from a multi-month low near the 143.00 level.
Analysis:
Naoki Tamura’s comments suggest that the Bank of Japan is still committed to maintaining its easy policy for the foreseeable future, with the neutral rate likely to remain at around 1%. This could have implications for the global financial markets, particularly for investors looking to trade the Japanese Yen and USD/JPY pair. It’s important to keep an eye on any further developments from the BoJ to gauge the direction of monetary policy and its impact on the currency markets.