On June 16, institutions commented that the Bank of Japan is sticking to its stimulus policy while waiting for signs of more sustainable inflation.
This week, many central banks announced interest rate resolutions, and the market refocused on interest rate differentials, pushing the yen to a seven-month low against the dollar and a 15-year low against the euro.
The Federal Reserve held off on raising rates this week, while the European Central Bank raised its key interest rate again, with both central banks signaling further hikes are likely as they continue to fight inflation.
By contrast, BOJ Governor Kazuo Ueda stuck to his view that the cost of tightening policy prematurely could do more damage to Japan’s fledgling inflation trends.
Japan has been trying to push up prices for years as part of its economic growth strategy.
Nevertheless, there are still rumors that the Bank of Japan may choose to adjust the YCC at the July meeting, which may trigger a new round of turmoil in the global market following the adjustment in December last year.