The market remains cautious of the Bank of Japan's hawkish signal, with the yen's direction to be determined by the Governor's future remarks

BlockBeats News, January 23rd, due to market concerns about fiscal policy, inflation, and geopolitical tensions, as well as ongoing market volatility, the Bank of Japan chose to keep interest rates unchanged next month before the general election. The BOJ voted 8-1 to maintain the short-term interest rate at 0.75%, with only board member Takashi Highsada believing that the price stability target has been largely achieved and proposing to raise the short-term interest rate target from 0.75% to 1.0%.

The market is now on for any hawkish signals from the central bank, after Prime Minister Sanae Takamichi promised to cut the consumption tax, triggering turmoil in the Japanese government bond market and weighing on the yen. Some analysts have warned that if BOJ Governor Haruo Ueda does not clearly indicate further rate hikes, especially as the BOJ aims to avoid sparking a political backlash ahead of the early election on February 8th, the yen could face new pressure. (Kabu.com)