ForexLive Asia-Pacific FX news wrap: BOJ drops hints of policy change/tweak in July

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Tanks in the streets in Moscow</a></li></ul><p>
Over
the weekend there was a filed coup attempt in Russia, see the bullets
above for the developments. Oil opened fairly steadily in US futures
Sunday evening trade but soon gained ground. Its since retraced that
gain is little changed on the session now.
</p><p>From
the session here today we had the Bank of Japan ‘Summary of
Opinions’ from its June meeting. The "Summary of Opinions"
provides a concise summary of the views expressed by Policy Board
members during the meeting. The full Minutes of this meeting will
follow on 2 August 2023.</p><p>Notable
from this meeting were comments from members to the effect that:</p><ul><li>There
is strong chance consumer inflation will moderate, but won't slow
back below 2%, toward middle of current fiscal year</li><li>Although
the rise in raw material prices has paused, firms' pass-through of
cost increases to their selling prices has intensified further, the
employment and income situation has improved, and inbound tourism
demand has recovered. Given this, inflationary pressure is likely to
remain strong for the time being</li><li>Corporate
behaviour has seen clear changes, and price and wage hikes have been
incorporated into corporate strategy</li><li>due
attention is required because the possibility that the persistence of
price rises in Japan has been underestimated cannot be ruled out, as
were the cases with Europe and the United States</li><li>One
member called for early revision of YCC policy. The
member said that while the BOJ should maintain its current monetary
stimulus for now, since the cost of waiting to achieve sustainable 2%
inflation is low for the BOJ’s overall easing program. However,
from the perspective of improving market functioning, communication
with investors and preventing sharp moves in interest rates when the
BOJ exits its current monetary easing, using yield curve control is
costly, the member added.</li></ul><p>Taken
together these points seem strongly indicative of a change to policy
coming at the July (27 an 28) meeting, at the very least a ‘tweak’
to YCC.</p><p>USD/JPY
opened a touch weaker on the session and has traded a circa 143.24 –
143.70 range.
</p>

This article was written by Eamonn Sheridan at www.forexlive.com.