When is the BOJ rate decision and how could it affect USD/JPY?

Early on Tuesday, around 03:00 AM GMT, the Bank of Japan (BOJ) will provide the decision of its routine monetary policy meeting. The central bank is widely expected to offer no change to its present monetary policy after the latest action in the emergency meeting. In doing so, the BOJ will keep the short-term interest rate target at -0.1% and directing 10-year government bond yields toward zero.

Though, the meeting becomes important for the USD/JPY traders following the central bank’s latest readiness to help private institutions. Other than the BOJ action, Governor Haruhiko Kuroda’s speech at 06:00 GMT will also become the key for the yen pair.

On Monday, Bloomberg spread expectations, based on a survey of economists, suggesting that the BOJ will increase the size of its loan program linked to government lending. As a result, a surprise announcement to flaunt the readiness to propel money markets by the Japanese central bank can’t be ruled out.

How could it affect the USD/JPY?

USD/JPY holds onto recovery gains from 107.23 to 107.38 by the press time of early Tuesday. The pair have recently cheered the market’s optimism but cautious sentiment ahead of the BOJ seems to guard the immediate upside. Although the BOJ is less likely to offer any major moves to the pair, a surprise announcement or a downbeat statement conveying economic risks could propel the pair’s further upside. However, the fears of the coronavirus (COVID-19) outbreak 2.0 and any positive comments from BOJ Governor Kuroda might question the pair’s near-term advances.

Technically, a confluence of 21 and 50-day EMA around 107.80 probes the pair’s immediate upside ahead of a 200-day EMA level of 108.35. On the contrary, an ascending trend line from March 16, around 106.65 now, restricts the pair’s immediate downside.

Key Notes

USD/JPY tracks Wall Street’s gains above 107.00, but buyers stay cautious ahead of BOJ

BOJ Preview: No significant changes to monetary policy

USD/JPY Forecast: Bullish only above 107.80

About BoJ Rate Decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.