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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The yen weakened sharply
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The yen weakened sharply

On Friday, the USD/JPY pair is rapidly rising after the unexpected decision by the Bank of Japan.

The Japanese yen today came under attack, although anything could have been expected from the January meeting of the Central Bank. The current quote in the USD/JPY pair is 120.93, and the growth is valued at 1.8%.

The main decision of this meeting - is the introduction of a negative interest rate, which now stands at 0.1%. The parameters of monetary policy on incentives remained the same: QE is maintained at 80 trillion yen annually. All decisions were taken by four votes "for" and only one "against".

Subsequent comments from the BOJ fit well into the fabric of their previous arguments. The country will achieve the inflation target in the first half of 2017, so says the regulator. In other voiced projections, core inflation in 2015 fiscal year will be 0.1%, in 2016 - 0.8% (the previous forecast expected 1.4%), in 2017 - 1.8% (one hundred percent match with earlier expectations).

In the 2015 fiscal year, the Japanese GDP grew by 1.1% against the previous estimate of 1.1%. This is a preliminary calculation.

The decision of the Central Bank with respect to the negative interest rate is intended to stimulate the economy and the credit demand is even stronger. This measure is very difficult for central banks, but in most cases very effective.
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