Will the 'nightmare' come again? Second bottom in BOJ meeting? If the hawkish sentiment strengthens for interest rate hike within this year, it will have a significant impact on the market. [BOJ meeting preview]
The Bank of Japan's monetary policy decision meeting, which will be the first meeting since the July meeting that triggered the "Black Monday of Reiwa," will be held on the 19th and 20th. The decision contents will be announced around noon on the 20th, and a press conference by Governor Haruhiko Kuroda will be held in the afternoon.
The previous July meeting became a memorable event for stock investors.In addition to the second interest rate hike since March, Governor Kuroda mentioned the possibility of further rate hikes later this year in a post-meeting press conference.Causing a surprise in the market,prompting a sharp appreciation of the yen and triggering the "Black Monday of Reiwa" on August 5th..
Although no policy changes are expected at this September meeting,Depending on the comments of Governor Ueda and others regarding the acceleration of interest rate hikes, the dollar-yen exchange rate and stock prices could have a significant impact once again, and there is also the possibility of heading towards a second bottom.The current exchange rate is swinging towards yen appreciation due to expectations of interest rate cuts in the United States, which overlaps with the previous "nightmare". It is likely to be a tense and important event that stock investors will closely watch.
The previous July meeting became a memorable event for stock investors.In addition to the second interest rate hike since March, Governor Kuroda mentioned the possibility of further rate hikes later this year in a post-meeting press conference.Causing a surprise in the market,prompting a sharp appreciation of the yen and triggering the "Black Monday of Reiwa" on August 5th..
Although no policy changes are expected at this September meeting,Depending on the comments of Governor Ueda and others regarding the acceleration of interest rate hikes, the dollar-yen exchange rate and stock prices could have a significant impact once again, and there is also the possibility of heading towards a second bottom.The current exchange rate is swinging towards yen appreciation due to expectations of interest rate cuts in the United States, which overlaps with the previous "nightmare". It is likely to be a tense and important event that stock investors will closely watch.
In the previous meeting in July, many market participants expected that the schedule for reducing purchases of long-term government bonds, which was indicated at the June meeting, would only be decided. In fact, at the July meeting, a plan was decided to gradually reduce the purchase of long-term government bonds by about 400 billion yen per quarter and halve it to around 3 trillion yen by January-March of 2026.
However, the meeting did not end there.Contrary to many market expectations, it was decided to raise the policy interest rate, which was lifted from negative interest rates of 0-0.1% in March, to 0.25%.Furthermore, Governor Ueda stated in a press conference after the meeting,"When the data exceeds or deviates from the outlook, there may be further adjustments to short-term interest rates (within the year)." "I am not particularly conscious of the barrier of exceeding 0.5%." - A hawkish statement.It surprised the market.
In response to this,On July 31, the dollar-yen rate temporarily reached the 153 yen level, but three business days later on August 5, it progressed to the 141 yen level.The sharp movement of nearly 12 yen in the direction of yen appreciation prompted a rollback of yen carry trades by overseas hedge funds, leading to the largest decline in the Nikkei average and the second largest decline in history, leading to the "Black Monday of the Reiwa era"."Bank of Japan = Risk factor of stock market" become established?!.
It became established that "Bank of Japan = Risk factor of stock market"."There will be no rate hikes in the financial capital markets in an unexpectedly unstable situation," he said. "For the time being, it is necessary to continue monetary easing firmly at the current level."(Bloomberg, dated July 7) From the perspective that the Bank of Japan has weakened its hawkish stance, the exchange rate has turned to a weaker yen and stock prices have also entered a recovery trend.
However, since thenPositive comments favoring an early rate hike have continued to be made by Bank of Japan policy board members, causing the yen to rise and stocks to fall.The Bank of Japan's view as a "risk factor" for the stock market seems to be taking hold.
On September 11, board member Junko Nakagawa said in a speech, "The current real interest rate is at an extremely low level,""From the perspective of achieving the sustained and stable realization of the 2% price stability target, the degree of monetary easing will be adjusted"(Nihon Keizai Shimbun, dated September 11). In response to these statements, the USD/JPY rate fluctuated from around 142 yen to a temporary low of 140.7 yen, reaching its highest level this year. On the 12th, board member Naoki Tamura held a press conferenceBy fiscal year 2026, it is necessary to increase short-term interest rates by at least 1%.and stated (on the 12th, Nihon Keizai Shimbun). The view that the USA will make a significant 0.5% rate cut in September has strengthened, so on the 16th,a temporary return to the 139 yen level for the first time in a year and two monthsIt reached the largest decline.
There are two aspects that overlap with the meeting prior to the previous one.There are two aspects that overlap with the meeting prior to the previous one..
One is that the yen is strengthening due to the US monetary policy at the moment.Before the previous meeting in July, the expectation of a shift to a rate cut in September in the US strengthened and the yen started to appreciate. The impact of the Bank of Japan meeting added to the market volatility caused by the yen appreciation, leading to the Black Monday of the Reiwa era. This time, the speculation of the Federal Reserve lowering the interest rate by 0.5% instead of 0.25% has increased, and the dollar has temporarily reached the 139 yen level for the first time in a year and two months. Another is that 'political factors' are involved. Last time, there were voices calling for an early additional rate hike for yen depreciation due to the low approval rating of the Kishida administration, which had an impact on the Bank of Japan's judgment. Toshimitsu Motegi, the Secretary-General of the Liberal Democratic Party, and Taro Kono, the Digital Minister, who made statements, are candidates running in the Liberal Democratic Party leadership election on the 27th. In addition, there are candidates such as Shigeru Ishiba, former Secretary-General of the Liberal Democratic Party, and Katsunobu Kato, former Chief Cabinet Secretary, who have made statements supporting rate hikes in the past for yen depreciation. Each candidate will hold speeches and other events across the country leading up to the leadership election, and there is a high possibility that their statements will be covered by the media.
One more is that 'political factors' are involved.Last time, there were voices calling for an early additional rate hike for yen depreciation due to the low approval rating of the Kishida administration, which had an impact on the Bank of Japan's judgment. There are doubts in the market that the Bank of Japan's judgment was influenced by voices calling for an early additional rate hike for yen depreciation coming from the Kishida administration, which is struggling with low approval ratings. Toshimitsu Motegi, Secretary-General of the Liberal Democratic Party, and Taro Kono, the Digital Minister, who made statements, are candidates running in the Liberal Democratic Party leadership election on the 27th.Toshimitsu Motegi, Secretary-General of the Liberal Democratic Party, and Taro Kono, the Digital Minister, who made statements, are candidates running in the Liberal Democratic Party leadership election on the 27th.Candidates such as Shigeru Ishiba, former Secretary-General of the Liberal Democratic Party, and Katsunobu Kato, former Chief Cabinet Secretary, who have made statements supporting rate hikes in the past for yen depreciation, exist.Comments on interest rate hikesAnd of course,Who is the leading candidate for the next prime minister?、Is there a high possibility of an early general election?Just the report of these factors may also have an impact on the statements of Governor Ueda and others.
On the other hand, there is a possibility that the policy decision by the US Federal Reserve (FRB) will be a different factor from the last time. The last time, the Bank of Japan meeting and the FOMC were held on the same day, and the announcement of the policy decision was first made by the Bank of Japan. However, this time, it will be the opposite. The September FOMC will be held on the 17th and 18th, and the announcement will be made in the early hours of the 19th Japan time. It is certain that the United States will shift to an interest rate cut, but there are differing views on whether the cut will be 0.25% or 0.5%.The results of the FOMC are expected to have an impact on exchange rates and Japan's stock market.It may also have an influence on the judgment of the Bank of Japan.
According to economists' estimates,Regarding the timing of the third rate hike, it is split between December this year and January 2025..
According to a Bloomberg survey of 53 economists conducted from the 6th to the 11th, 53% answered December, 19% answered January 2025, and 15% answered October this year for the next rate hike timing. The answer for September was zero (as of September 13, Bloomberg). According to a Nikkei QUICK News survey of Bank of Japan watchers conducted from the 9th to the 11th, out of 27 respondents, 12 answered December and 11 answered January. The answer for September was also zero (as of September 12, Nikkei Economic Daily).
Economists at the moment seem to believe that the economic and price situation is progressing as planned and that gradual rate hikes will proceed as scheduled, as indicated by the successive statements from Bank of Japan deliberation board members.
In response to this,The market has not fully priced in the additional rate hikes for the rest of the year.According to Bloomberg on the 17th,The swap market has only priced in a 32% probability of additional rate hikes for the rest of the year, and if the Bank of Japan hints at rate hikes, there is a possibility that the USD/JPY could reach 135 yen by the end of the year.Some economists even believe that if the yen continues to strengthen, there could be an impact on the market, as many listed companies have assumed an exchange rate of the 140 yen range for this fiscal year and have not factored in the 130 yen range.
We should pay attention to the hawkish comments from Governor Ueda and others regarding additional rate hikes for the rest of the year, as they could have an impact on the market if the yen appreciates further.We should take note of the potential impact on the market if the yen continues to appreciate as a result of hawkish comments from Governor Ueda and others regarding additional rate hikes for the rest of the year.We should be aware of the potential impact on the market if the yen appreciates further as a result of hawkish comments from Governor Ueda and others regarding additional rate hikes for the rest of the year.
So far,Regarding the economic and price situation, it has become in line with the Bank of Japan's outlook (ontrak inc 9.50% cum perp pdf stk series a), creating an environment where hawkish comments are easier to make.it can be said.
The consumer price index for Tokyo's main city area in August, excluding fresh food (core CPI), announced by the Ministry of Internal Affairs and Communications on August 30, increased by 2.4% compared to the same month of the previous year. Price increases in rice and other factors have expanded the increase from 2.2% in July.
In addition, according to the Monthly Labor Statistics Survey released by the Ministry of Health, Labour and Welfare on the 5th, real wages increased by 0.4% from the same month of the previous year, marking the second consecutive month of positive growth. The revised GDP for the April-June period released by the Cabinet Office on the 9th also showed a recovery trend with a 2.9% increase on an annualized basis.
However, the situation regarding personal consumption is still not yet in a state of recovery. According to the Household Survey for July released by the Ministry of Internal Affairs and Communications on the 6th, real consumption expenditure (households of 2 or more people) turned positive for the first time in 3 months, but the increase from the same month of the previous year remains at 0.1%.
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Sources: Bank of Japan HP, Ministry of Internal Affairs and Communications HP, Ministry of Health, Labour and Welfare HP, Nikkei, Bloomberg, NHK
Sources: Bank of Japan HP, Ministry of Internal Affairs and Communications HP, Ministry of Health, Labour and Welfare HP, Nikkei, Bloomberg, NHK
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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NAOKI1116 : A rapid appreciation of the yen will cause major disruptions to the Japanese economy. Do you know how many trillion yen the market capitalization of Japanese companies jumped by after the last rate hike? Ueda-kun, Uchida-kun.
exera : I totally agree with that. If it were a gradual appreciation of the yen, it would be understandable, but this time it's too hasty. It will decrease Japan's international competitiveness and weaken Japanese companies. If salaries decline and the economy doesn't improve, it's doubtful whether they are really putting the interests of the nation and domestic companies first.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
181370556 exera : Regardless of what the people think, the role of the Bank of Japan is to ensure price stability and financial system stability. It is true that they failed to fulfill this role last time and simply had a poor approach.
182143940 : We need to be careful about raising interest rates, right?
Oh, Mr. Ueda!
TOHOHO : I want you to quit Zeta.
日々勉強 : The Hindenburg Omen has been triggered three times this month...
182493113 : I hope Ueda doesn't overdo it.
The future of the Japanese economy is at stake.
183230756 : Many ordinary people are being brainwashed into thinking that high prices are the main cause of the weakening yen. The real cause is inflation overseas.
There are also many economically illiterate members of parliament, which is why many people in Japan mistakenly believe that a weak yen is a negative thing.
Because of these kinds of politicians, Japan has been in deflation for 30 years but has implemented inflationary policies.
I hope that people who understand the concept of neighboring poverty can steer the economy.
183230756 TOHOHO : Agree
fire希望 : I'm happy with the current market, but I'm thinking that Ueda will probably pour cold water on it again
I hope that today, named tomorrow, will not pour cold water.