The Japanese currency fell by 0.5% to 143.49 Yen per USD at 11:56 am on December 19 in Tokyo. The Topix index ended the morning session with a 0.2% decline, while the Nikkei 225 index increased by 1% on the Osaka Exchange.
Many had anticipated that the BOJ would keep the negative interest rate regime, the last one globally, after the meeting on December 19. Additionally, the market was interested in any hints about policy changes and their timing.
Over the past month, the Yen had strengthened due to investors’ expectations that the BOJ would end negative interest rates early next year. Meanwhile, the U.S. Federal Reserve signaled a shift towards interest rate cuts in 2024.
In November, the Yen had dropped to its lowest level in 2023 at 151.91 Yen per USD.
In contrast to the Yen, the Japanese stock market had gradually declined in recent weeks but rebounded after the latest news. The yield on Japan’s 10-year government bonds was at 0.675% at the end of the morning session, down from 0.97% on November 1.
Statements in early December by BOJ Governor Kazuo Ueda and one of the deputy governors fueled speculation about a rate hike in December. The rumors subsided after a well-informed source indicated that the central bank saw no urgent need to immediately abandon negative interest rate policies.
The Japanese Cabinet Office mentioned that Economic Revitalization Minister Yoshitaka Shindo attended the BOJ meeting. From April 2020 until now, it is the first time a Cabinet official has attended such a meeting. Shindo’s presence underscores the significance of BOJ policy decisions for the government, as most economic analysts predict the end of negative interest rate policies in April 2024.
According to Bloomberg.
By. Pham Thanh Bien
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