PANews reported on December 19 that the Bank of Japan announced today that it would maintain its policy interest rate at 0.25%, marking the third consecutive time that it has suspended interest rate hikes. The vote was 8:1, with only member Naoki Tamura supporting a rate hike to 0.5%. As a result, the USD/JPY pair surged 70 points in the short term, reaching 155.27, and analysts warned that the yen faced the risk of further depreciation.
The Bank of Japan said it will continue to observe the correlation between wage growth and inflation targets, and inflation is currently expected to be roughly consistent with the 2% target in the late fiscal year 2026. The market is paying attention to the press conference of Governor Kazuo Ueda in the afternoon for clues on future interest rate hikes. Analysts believe that if there is no clear hint of a rate hike in January or March next year, the yen may weaken further and the dollar against the yen may rise to the 160 mark.
