Yen movements from the meeting of the Central Bank of Japan
The Japanese yen rose following the Bank of Japan's decision on interest rates, as the Bank of Japan fixed interest rates at 0.5% as expected.
The Bank of Japan did not surprise the markets much at the conclusion of its two-day monetary policy meeting, keeping interest rates steady and setting a new plan to slow the pace of its balance sheet drawdown next year in the face of increasing risks, such as conflict in the Middle East and US tariffs.
The statements of Kazuo Ueda, the governor of the Bank of Japan, at his press conference were as follows:
- Financial markets must set long-term interest rates.
- We have offered bond purchase plans until the first quarter of 2027 to ensure flexibility and predictability.
- The Japanese economy is recovering moderately, although some weak moves have been observed.
- Easy monetary conditions will support the economy.
- We will continue to raise interest rates if the economy and prices improve.
- Commercial developments and their effects are still very uncertain.
- The central bank will direct monetary policy from the perspective of achieving the price target in a sustainable and stable manner.
- There are potential risks of rising and falling prices.
- We will continue to carefully monitor the data when making policy decisions.
- There is a growing opinion that pessimistic data will be released in the second half of 2025.
- There are more pessimistic statements about morale globally.
- The decision to reduce the bond purchase program is aimed more at avoiding excessive volatility in the market.
