The Bank of Japan, fresh from adopting negative interest rates in January, is expected to stand pat when its two-day meeting ends on Tuesday.
The market will sift through the BOJ's policy statements for any hints that it may be losing confidence in negative rates after the ECB suggested it will have to be cautious on cutting ever deeper.
The market will sift through the BOJ's policy statements for any hints that it may be losing confidence in negative rates after the ECB suggested it will have to be cautious on cutting ever deeper.
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| Forex Signal |
"Despite the large scale ECB easing last week, our economists are not looking for the BOJ to follow suit, certainly not in terms of a lower negative rate," said Viraj Patel, currency strategist at ING.
"If anything, the BOJ may look to ease some of the burden on the financial sector and this may come in the form of a small expansion of corporate bond/ETF purchases or increased exemptions of funds subject to the new negative rate policy."
The BOJ's surprise decision to take rates below zero on Jan. 29 did little to weaken the
yen, which eventually soared to a 16-month high against the dollar last month.
