When is the BOJ rate decision and how could it affect USD/JPY?

Early on Thursday, around 03:00 AM GMT, the Bank of Japan (BOJ) will announce routine monetary policy meeting decisions, as well as the quarterly BOJ Outlook Report, taken after a two-day brainstorming. Following the rate decision, BOJ Governor Haruhiko Kuroda will attend the press conference, around 06:00 AM GMT, to convey the logic behind the latest policy moves.

The Japanese central bank is widely expected to keep the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields toward zero.

Although the BOJ isn’t expected to offer any change in its monetary policy, the latest hawkish moves of the major central banks and the inflation fears highlight today’s BOJ as the key event for the USD/JPY traders. Also increasing the importance of the BOJ announcements are the quarterly economic forecasts from the outlook report.

Ahead of the event, Standard Chartered said,

Additionally, FXStreet’s Valeria Bednarik said,

How could it affect the USD/JPY?

USD/JPY extends pullback from intraday high towards 138.00 as traders brace for the Bank of Japan (BOJ) monetary policy report. Downbeat US Treasury yields and the market’s fears of recession, not to forget aggressive central bank actions and covid woes, seem to exert downside pressure on the yen pair of late.

Japanese policymakers have already turned down the expectations of any major moves from the Bank of Japan (BOJ). However, the Japanese policymakers have recently shown their dislike for the yen’s weakness and volatility in the market, which in turn could join the broad inflation woes to push the BOJ towards dumping its age-old dovish bias. The same could quickly drag the USD/JPY pair towards an upward sloping support line from mid-June, near 137.50. However, the risk-off mood and firmer USD, as well as fewer odds of the BOJ’s hawkish mood, can keep the USD/JPY buyers hopeful.

Technically, USD/JPY remains firmer above a five-week-old support line and the 21-DMA, respectively around 137.50 and 136.70, which in turn could keep the pair buyers hopeful.

Key Notes

USD/JPY bulls move in on a critical hourly resistance

BOJ Preview: Still on hold, but for how long?

About BoJ Rate Decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.