BOJ to hold at 1.25%, but Ueda signals further hikes toward neutral
USD/JPY — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Rabobank | Bullish | 145.00 |
ING | Bullish | 152.00 |
MUFG | Bullish | 152.00 |
From the original
With a hold widely expected, yen and JGB moves are likely to hinge on the vote and Ueda’s guidance. Hawkish dissent from Takata or Tamura, or language pointing to the next meeting, would probably bring December pricing forward and offer the yen some support. A unanimous hold pair
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BoJ preview: MUFG sees hold but a 2% inflation call, with two dissenters the key yen risk
The desk expects the Bank of Japan (BoJ) to maintain its current interest rate at 1.25% during the upcoming meeting, citing a shift in rhetoric towards a declared effective 2% inflation target as a potential precursor to future rate hikes. This perspective aligns with insights from MUFG, which suggests that a firm communication from BoJ Governor Ueda may enhance support for the yen and accelerate expectations for rate increases in December [source]. Current positioning may be sensitive to dissent from two board members traditionally opposed to rate hikes, who could pose a risk to yen stability if they advocate for a cut instead. Should the BoJ maintain a cautious stance while inflation remains a concern due to external pressures such as rising oil prices, it could lead to upward pressure on short-end JGB yields and support the yen in the near term.
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