The pair rose to a high of 148.54 as the BOJ left policy unchanged, before gradually slipping to near 148.00 now - trading flattish on the day. In the bigger picture, the 100-day moving average at 147.50 is the key technical level to watch. Hold above that and buyers are still in it with a shout for the week.
Going back to the BOJ policy decision itself, there were a couple of things to pick up on. They aren't anything substantial but it continues to support the idea of a policy pivot potentially in March or April. The first of which is the subtle addition to the outlook summary for prices. In October last year, the central bank stated:
"CPI inflation is likely to increase gradually toward achieving the price stability target.."
Today, they noted that:
"CPI inflation is likely to increase gradually toward achieving the price stability target.. The likelihood of realizing this outlook has continued to gradually rise, although there remain high uncertainties over future developments."
Besides that, they did revise their inflation projections a little with the most notable being a downgrade to the forecast for fiscal year 2024:
That being said, the 2.4% forecast is still higher than the 2% price target and continues to support a likely policy pivot to come in the months ahead.
To summarise, the BOJ continues to preach patience before we get to the spring wage negotiations. They are still laying the groundwork for a potential change in the spring but it is still no guarantee that they will do so.
So, this isn't quite the disappointment that we have been accustomed to with most BOJ policy decisions from last year. Carry on as you will.
