The Yen experienced a decline following the Bank of Japan’s (BOJ) announcement to hold steady its key interest rates. The central bank’s decision reflects its ongoing strategy to foster economic growth amid global uncertainties.

BOJ’s Stance

The BOJ’s monetary policy board voted to maintain the short-term interest rate at -0.1% and the target for the 10-year Japanese government bond yield at around 0%. This decision aligns with market expectations and reinforces the BOJ’s commitment to its ultra-loose monetary policy.

Market Reaction

In response to the BOJ’s announcement, the Yen depreciated against major currencies. The currency’s weakness reflects investor sentiment that the BOJ’s dovish stance will continue to weigh on the Yen.

Economic Outlook

The BOJ acknowledged the ongoing impact of the COVID-19 pandemic and geopolitical risks on the Japanese economy. The central bank reiterated its commitment to providing ample liquidity and supporting businesses through its various lending programs.

• Maintaining short-term interest rate at -0.1%
• Targeting 10-year JGB yield at around 0%
• Continuing asset purchases

Analysts anticipate that the Yen will remain under pressure as long as the BOJ maintains its ultra-loose monetary policy, especially with other major central banks tightening their monetary policies to combat inflation.