JPY is compelled to decline. Overview for 19.12.2023

The Japanese yen is compelled to decline against the US dollar on Tuesday. The current USDJPY exchange rate stands at 143.50.

The Japanese yen is falling because the Bank of Japan is doing none of what the market expects from it. The December meeting was utterly formal. The CB maintained its ultra-soft credit and monetary policy and provided no indications regarding whether it would deviate from this approach in 2024.

The interest rate remained at -0.10% per annum.

The BoJ characterises economic trends as quite promising. The economy continues its moderate recovery, and inflation is expected to exceed the sustainable 2% soon. However, this will be temporary because a local slowdown in the CPI is expected later. The CB simultaneously studies the currency rate, market movements, and their impact on the economy and prices carefully.

Overall, there is nothing new for investors and nothing particularly pleasant for the yen.

The market had expected the rhetoric to change, at least in some sense, but nothing happened.