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

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.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/upward-revision-to-boj-cpi-inflation-forecast-may-afford-little-protection-to-jpy-rabobank-202404231119