Upward revision to BoJ CPI inflation forecast may afford little protection to JPY – Rabobank
23.04.2024, 11:19

Upward revision to BoJ CPI inflation forecast may afford little protection to JPY – Rabobank

Analysts at Rabobank share their outlook for USD/JPY ahead of the Bank of Japan's (BoJ) policy meeting later in the week.

Market will watch out for signs of any change in BoJ’s bond buying programme

"It is our house view that the Fed is likely to kick off its rate cutting cycle in September. If US economic data support this view, the USD could start to edge lower in the summer which would likely allow the JPY to find some purchase against the USD. In the meantime, the MoF will be hoping for an improvement in Japanese economic data to keep the JPY bears at bay."

"An upward revision to the BoJ’s CPI inflation forecast at this week’s policy meeting may afford a little protection to the JPY, though this would have more impact if policy-makers assess that domestically driven price pressures have risen."

"In addition to its policy rates, the market will also be watching out for signs of any change in the BoJ’s bond buying programme. If the BoJ is judged by the market as lacking any hawkish signals, downside pressure in the JPY would likely increase suggesting more pressure on the MoF to put its money where its mouth is. Our 3 month USD/JPY 148 forecast assumes that the Fed will be laying the groundwork for a September rate cut during the summer."

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