Overview
- The Bank of Japan is widely expected to leave its policy rate unchanged at 0.75% at the March 18–19 meeting.
- Governor Kazuo Ueda told parliament that underlying inflation is gradually strengthening and is seen converging around 2% between the latter half of fiscal 2026 and fiscal 2027.
- Ueda emphasized that achieving the price goal must be supported by solid wage gains, reinforcing a cautious approach to further tightening.
- Rising long-term JGB yields have investors watching for potential adjustments to the pace of bond purchase tapering, with Ueda pledging nimble action if yields spike abnormally.
- Currency traders remain alert to possible intervention as the yen stays under pressure, with USD/JPY sensitivity heightened near the 160 level.