The reasons for the yen's decline against most currencies today
The yen fell by more than.1% on Thursday to reach levels of 144.70 yen to the dollar so far, its weakest level since mid-April.
The Bank of Japan (BOJ) today kept the interest rate unchanged at 0.5%, as forecast due to the uncertainty caused by tariffs imposed by US President Donald Trump.
The Bank of Japan in support of its forecast said that economic growth in Japan is likely to slow down, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies, a decrease in profits of domestic companies and other factors.
The central bank's fixing of interest rates was unanimously expected, but investors considered that lowering expectations reduces the likelihood of raising them in the future.
The statements of the governor of the Bank of Japan Kazuo Ueda at his press conference were as follows:
- The Japanese economy is experiencing a moderate recovery, although some weakness continues to be observed.
- Economic growth is likely to slow down.
- Economic forecasts and prices may change significantly depending on how countries deal with US tariffs.
- Due attention should be paid to the financial and foreign exchange markets and their impact on the Japanese economy and prices.
- It is expected to continue raising interest rates if the economy and prices move in line with expectations.
- Inflation and wage growth are expected to slow down due to tariffs and slowing global growth, but core inflation is expected to gradually rise eventually.
- The forecast is not as certain as before.
- The timing of the arrival of core inflation to the 2% target will be somewhat delayed.
- He will guide the policy from the perspective of achieving the price target in a sustainable and stable manner.
- The timing of the next interest rate hike may be significantly affected by tariffs.
- Statements about slowing growth and easing price pressures are aimed at justifying the absence of a rate hike today, and possibly also in June.
