GBPJPY Prediction Q3 2022.
Recent anxiety that the global economy risks a hard landing as central banks race to confront inflation has helped reduce market pressure on the BOJ, with fewer speculative bets against the yen and Japanese assets.
By remaining pat, the BOJ looks ready to become the last holdout on rates among major developed economies later Thursday, assuming the European Central Bank follows ahead with its first raise in more than a decade, as is generally predicted.
This is how the painting looks like:
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Key points:
- The friction between the BOJ’s monetary stance and market bets is expected to return if global recession worries soften.
- Japan is looking to achieve sustainable inflation after long period of low inflation.
- No sign of peak in U.K. inflation
- Long-term technical confirmation on GBPJPY chart.
Steady raising U.K inflation
source: tradingeconomics.com
The Japanese central bank also stated it would continue to offer to buy an unlimited quantity of bonds at a fixed rate on a daily basis, showing its intention to defend its own YCC framework. Just last month it was compelled to buy a record quantity of bonds to protect its yield ceiling.
The BOJ’s extended holding pattern and its inclination toward more easing signal it is still prepared to risk a further weakening of the yen and additional attacks on its yield cap as it pursues its goal of steady growth with sustainable inflation. This is the main reason on our GBPJPY Prediction Q3 2022.
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