JPY has strengthened. Overview for 30.10.2023

The Japanese yen paired with the US dollar has stabilised its position. The current USDJPY exchange rate stands at 149.56.

Today marks the beginning of a two-day meeting of the Bank of Japan, scheduled to conclude on Tuesday with a decision on the interest rate. There is a high likelihood that the rate will remain at -0.10% per annum. It is essential to pay attention to the structure of the Central Bank's statement, as it is expected to focus extensively on further devaluation of the yen and its impact on the economy and finances.

The BoJ may attribute its inaction to the insufficient growth in wages in Japan. However, the central bank may simultaneously raise its core inflation forecasts for FY 2023 and FY 2024, while the outlook for 2025 is expected to remain unchanged, below 2%.

The yen is significantly influenced by the fact that the Bank of Japan is still not ready to change the structure of its monetary policy. The difference in interest rates between BoJ and the US Federal Reserve is causing the JPY to retreat.