The Bank of Japan (BoJ) has decided to maintain its ultra-loose monetary policy, a long-standing approach that has been a subject of speculation for weeks.
BoJ announced on Tuesday immediately affected the financial market, with the yen weakening against the dollar and a notable boost in stock prices.
The BoJ’s stance comes amid global economic uncertainties and contrasts sharply with the policies of other major central banks, which have been raising borrowing costs to control inflation.
The yen’s depreciation to 143.46 yen from 142.65 yen in early trade, coupled with the Nikkei 225 index’s rise by over one per cent, highlights the market’s reaction to this announcement. Financial analysts, like Katsutoshi Inadome from SuMi TRUST, anticipate potential policy changes in 2024, particularly about interest rates, as the BoJ assesses wage increases and its inflation targets.
The Bank of Japan’s decision is also seen in the context of global monetary policies, especially about the United States Federal Reserve. Having held interest rates at a 22-year high, the Fed has signalled possible rate cuts in 2024.
The scenario presents a strategic challenge for the BoJ, as it aims to avoid synchronizing its potential rate hikes with the Fed’s anticipated policy shifts, suggesting January 2024 as a likely time for the BoJ to modify its policy.
 reaffirmed its ultra-loose monetary policy, impacting financial markets with a weakened yen and boosted stock prices. Amid global economic uncertainties, the BoJ's stance diverges from other central banks' inflation control measures. Financial experts predict policy shifts in 2024, focusing on interest rates and inflation targets, while aligning its strategy with the US Federal Reserve's anticipated rate cuts.){kind=link}