For years the Bank of Japan (BoJ) has taken the crown as the most dovish central bank in the G10. That is unlikely to change in the foreseeable future, therefore, USD/JPY is set to edge higher towards the 115.00 level, in the view of economists at Rabobank.
Extraordinary easing policies of the BoJ to continue
“In its December policy meeting, the BoJ announced that its monetary policy provisions would remain very generous in terms of its QQE programme and a negative policy rate. That said, the BoJ did confirm that it would complete its additional purchases of CP and corporate bonds at the end of March 2022 as scheduled. From April, purchases will return to about pre-pandemic levels.”
“USD/JPY is likely to trend higher at a gentle pace towards 115 medium-term, with the JPY undermined by the continued extraordinary easing policies of the BoJ.”
