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June 14, 2018

FXGiants, What to expect from Bank of Japan's Interest Rate Decision on June 15th

Japan Interest Rate Decision on Friday, 15th June 2018.

This article is originally referred from FXGiants News.

  1. BOJ is to announce its interest rate decision tomorrow 15th of June during the Asian session and is widely expected (probability of 96.24% according to JPY OIS) to remain on hold at -0.10%.
  2. Should the bank remain on hold we could see the market turning its attention to the accompanying statement, which could have a neutral to dovish tone due to the recent lukewarm financial data. Should that be the case we could see the JPY weakening against its major counterparts. On the other hand, if any new measures are introduced by BOJ in order to counteract the economy’s latest slowdown we could also see JPY moving sideways.

Japan’s current stimulus program showed weakness in the latest months, just when the government and the central bank wanted to put an end to it.

Eventually, BOJ could be forced to fight the next economic downturn with a near-empty policy arsenal.

At the same time, there are signs that growth is moderating after two years of expansion, with reference to the slowing factory output growth rate.

Trade issues arising from the US trying to enact tariffs has afflicted Japans business sentiment while wages have not added value even as Japanese companies are making huge profits.

Household spending along with service-sector activity was down in previous months.

All these factors indicate Japans central bank could be heading for some difficult situations with some definite decisions needed to be taken.

BOJ stimulus package used in the latest years may have been a little too aggressive and may have not completed the job it was assigned to do.

According to media reports, Abe could be planning to deal with the above mentioned issues by enforcing an additional budget approximately the size of Japans sales taxes budget in order to manage unexpected costs.

This budget could be put together as soon as October 2018 in an attempt to inspire some calmness and strategic leadership within Japan.

This however, could be up to the Japanese government to decide.

Original Source: FXGiants News

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