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“Conserving Ammunition” seems to be the watchword going into the BOJ’s interest rate decision, which we are expecting later tonight.
There had been some talk that they might cut rates in line with the global race to the bottom. However, those expectations have since evaporated as we have gotten closer to the meeting. The last potential nudge for the BOJ to relax policy would be if the Fed cuts for a third time later today.
That doesn’t mean we aren’t expecting there to be some movement in the currency as a consequence of the policy meeting. The BOJ had previously hinted that it would take action in this meeting.
And, even if the chances of a rate cut have diminished, it doesn’t mean that other measures won’t be announced.
The Chances of a Rate Cut
As recently as the last BOJ meeting, Governor Kuroda said that further negative rates would be an important part of easing. Especially should the bank decide that it is necessary. This led to expectat...
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