USD/JPY: Poised to reclaim 119.00 as BOJ keeps interest rate unchanged at -0.1%

• BOJ has kept the interest rate unchanged at -0.1%.
• USD/JPY has shown a minor correction post the announcement but is likely to rebound amid the overall bullish picture.
• Japan’s yearly National CPI has been recorded at 0.9% well below the upside cap of 2%.

The USD/JPY is hovering around 118.70 after claiming a fresh six-year high at 119.12 and is eyeing to recapture the latter as the Bank of Japan (BOJ) has kept the interest rate unchanged at -0.1%. The decision of maintaining the status quo is very much in-line with the expectations of the markets participants. A minor correction has been witnessed in the asset post the announcement, which may be recovered soon amid the overall positive picture.

BOJ Governor Haruhiko Kuroda has preferred to stick to an unchanged policy led by capped inflation print in Japan. The Statistics Bureau of Japan has reported the yearly National Consumer Price Index (CPI) at 0.9%, much higher than the previous print of 0.5% and market consensus of 0.3%. Despite the elevated print, Japan’s inflation is well below the upside cap of 2%. Meanwhile, the National CPI ex-fresh food has landed at 0.6% in line with the street estimates but higher than the previous figure of 0.2%.

Meanwhile, the US dollar index (DXY) is trying to stabilize around 98.00 after a steep fall of 1.5% this week. The elevation of interest rate by 0.25% from the Federal Reserve (Fed) has weighed pressure on the greenback. Investors were expecting an aggressive interest rate hike to corner the inflation mess but a gradual approach to contain the galloping inflation failed to cheer the market participants.