The Yen stopped strengthening. Overview for 16.07.2021

USDJPY is rising after decisions from the Bank of Japan; market players are analyzing updated forecasts. 

The Japanese Yen is falling against the USD after growing steadily for a couple of days. The current quote for the instrument is 109.98.

During today’s meeting, the Bank of Japan decided to keep the benchmark interest rate unchanged at -0.10%, just as expected. What really was unexpected is the deterioration in the economic outlook for the next year. At the same time, the regulator confirmed once again that the country’s economy was on the right way to slow recovery. 

So, the BoJ’s current expectations relating to the GDP are the following: the indicator is expected to add 3.8% this fiscal year, which ends in March 2022, against the previous estimation of 4.0%. The next year, +2.7% vs 2.4%, mostly due to the expectations of an active vaccination campaign and the economic recovery to its normal state. 

According to the BoJ, the economic outlook remains rather dim because the ongoing coronavirus pandemic may still have a significant influence on both domestic and foreign economies. 

Forecasts for the consumer price index have also been revised. The indicator is expected to show 0.6% against the previous estimation of 0.1% due to the recent upsurge in prices for energies and raw materials. 

The Bank of Japan paid particular attention to activities aimed at combating climate change – the regulator decided to boost funding until the 2030 fiscal year. The program implies funding banks that work with alternative energetics and invest in “green” bonds.