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USD/JPY Forecast: Quantitative Tightening and Interest Rate Implications
It is a crucial week for the USD/JPY as Wednesday’s Bank of Japan monetary policy decision looms. Uncertainty remains on whether the BoJ will raise interest rates and aggressively cut Japanese Government Bond (JGB) purchases. Inflation Trends and BoJ Policy Speculations Tokyo’s CPI Ex Food and Energy increased 1.5% year-on-year in July, down from 1.8% in June, well below the BoJ’s 2% target. Softer-than-expected inflation eased investor bets on a July BoJ rate cut. However, the BoJ faces pressure to tighten monetary policy to bolster the Japanese Yen. Government and BoJ Commentary The Japanese government is ... (full story)