Analysis: The Bank of Japan's statement paves the way for interest rate hikes as early as the fourth quarter, with the yen strengthening pushing USD/JPY towards the 147 level

ChainCatcher news, according to Gelonghui, institutional analysis indicates that the Bank of Japan maintained its policy interest rate at 0.50% with a 7-2 voting result, in line with market expectations. Committee members Takeda Hajime and Tamura Naoki voted against maintaining the rate (advocating for a 25 basis point increase).

The policy statement is more detailed than before, reiterating the judgment that the economy "shows signs of weakness in some areas, but is overall experiencing a moderate recovery," and emphasizes that it will closely monitor the impact of uncertainties on the financial foreign exchange market, Japanese economic activity, and prices. The bank specifically pointed out that the outlook faces "multiple risks," stating that "the evolution paths of trade and other policies in various jurisdictions, as well as the responses of overseas economic activity and prices, are highly uncertain."

Although Japan and the U.S. have signed a trade agreement, the statement still emphasizes high uncertainty and clearly indicates that the tariff environment is less favorable for Japanese businesses compared to the zero-tariff era before the Trump administration.

The dollar continues to decline against the yen, hitting a post-decision low of 147.28, while the Tokyo morning session generally maintained levels around 148.00. The yen is leading among G10 currencies today, as the market interprets the Bank of Japan's statement as paving the way for an interest rate hike as early as the fourth quarter.