Intouch Asia FX head Kieran Williams said the Bank of Japan's rate rise was
fully priced and markets are focused on accompanying measures. The BOJ's
statement was broadly dovish: it plans to pause reducing JGB purchases from
April 2027, a concession to the bond market that contradicts earlier warnings
that core CPI could exceed 2%. Williams said the policy path now depends on
developments in the Middle East and oil-price pass-through; a large yield
differential with the US will likely keep the yen weak. In the medium-to-long
term, this step is unlikely to relieve yen pressure, so intervention remains a
real near-term risk. Deputy governor Uchida's press conference is a key
variable; with Governor Ueda absent, markets will watch how he defines the
timing and pace of the next hike.
