Investing.com – Following Japan’s monetary authority’s decision to keep interest rates at 0.10%, having previously abandoned ultra-loose policy with negative rates, there is a feeling that bond buying will end later than expected and the yen will weaken. Julius Baer noted in his note on Friday. A devaluation is predicted to 160 from the current 157.46.
“Bond purchases will now be phased out and will only begin in July. The completion of bond purchases later than expected and unchanged interest rates disappointed and weakened the yen,” the Swiss group said.
David Kohl, chief economist at Julius Baer, says details on how bond purchases will be phased out are not expected until the next meeting, which would disappoint investors.
“Tightening at the next meeting is now highly likely, but will likely be done cautiously,” adds Kohl, who forecast a ten basis point rate hike in July.
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