The EUR/JPY currency pair is gaining traction around the 160.00 mark during the early European session on Friday. The Bank of Japan (BoJ) has opted to keep its policy rate unchanged, as anticipated, though the uncertain outlook for future monetary policy may limit the Japanese Yen‘s (JPY) potential for gains in the near term.
Following a two-day meeting, the BoJ maintained its benchmark interest rate at approximately 0.25%, the highest level since 2008. Stefan Angrick, associate director at Moody’s Analytics, noted expectations for a rate hike in October and a gradual reduction of monetary support this year, despite recent disappointing economic data.
BoJ Governor Kazuo Ueda emphasized in a press conference that the central bank would adjust its easing measures if economic and price forecasts are met. He acknowledged ongoing uncertainties surrounding Japan’s economy and prices, stating he would monitor market trends with a heightened sense of urgency. Despite this caution, Ueda reiterated his belief that the BoJ would continue to raise rates if economic conditions align with expectations.
On the flip side, the European Central Bank (ECB) recently cut interest rates during its September meeting. Investors are now looking ahead to remarks from ECB President Christine Lagarde later on Friday. Any dovish comments from Lagarde could negatively impact the Euro (EUR), while a hawkish tone might bolster its value.
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