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On July 10th, Japanese Economy and Fiscal Policy Minister Minoru Jonouchi stated on Friday that the government would never pre-convey its preferences regarding how the central bank should set interest rates, thus mitigating market concerns about political interference in monetary policy. This followed a draft economic blueprint stating that "appropriately guiding monetary policy to achieve a stronger economy is very important," which exacerbated market concerns that the dovish government of Prime Minister Sanae Takaichi might pressure the Bank of Japan to postpone interest rate hikes. The draft also mentioned a legal provision requiring the Bank of Japan to align its policy decisions with the governments economic agenda, but did not mention another provision ensuring its legal independence from political interference. At a press conference, Jonouchi stated, "The governments specific monetary policy measures are determined by the Bank of Japan, and this position remains unchanged." He pointed out, "The government will never pre-convey its views to the Bank of Japan on matters such as the timing and magnitude of interest rate hikes, or the direction of monetary policy." However, he added that the government and the Bank of Japan "should obviously" share an understanding of the economic, price, and financial situation.On July 10th, the highest 7-day annualized yield of Tencent Wealth Managements "Current Account +" was 1.1800%, and the lowest was 0.7080%. The highest 7-day annualized yield of WeChat Pays "Lingqian Tong" was 1.0060%, and the lowest was 0.9330%. The highest 7-day annualized yield of Alipays "Yuebao" was 1.0190%, and the lowest was 1.0020%.Japanese Finance Minister Satsuki Katayama: Japan will seek measures to encourage GPIF and other pension funds to increase their investments in Japanese financial assets.According to data from Longzhong Information, on July 10th, the average weekly capacity utilization rate of monomer units in 13 sample companies of domestic organosilicon DMC this week (July 3rd - July 9th, 2026) was approximately 61.79%, remaining stable compared to the previous week. Weekly output was 40,700 tons, unchanged from the previous week.On July 9, Ling Ji, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations, held a video conference with Robert Redonne, Deputy Director-General of the European Commission’s Directorate-General for Trade and Economic Security, to exchange views on China-EU economic and trade relations.

USD/JPY falls to 146.00 as the DXY weakens and interest in BOJ policy rises

Alina Haynes

Oct 27, 2022 15:28

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During the Asian session, in response to negative signals from the US dollar index, the USD/JPY pair plunged below 146.00. (DXY). Following Wednesday's low of 146.22, the asset's two-day downward trend has extended. The main index is reaching the bottom of Monday's knee-jerk reaction near 145.77 as it continues to decline.

 

The dollar bears are facing a severe sell-off due to the positive market sentiment. The risk-sensitive currencies have benefited from an increase in risk appetite. The US dollar index (DXY) has struck a new monthly low of 109.56 and is anticipated to stay volatile until the release of crucial US economic data.

 

The increased demand for U.S. government bonds has resulted in a decline in yields. This is due to the global markets' increased confidence. The yield on 10-year United States Treasury notes has decreased to 4%.

 

According to estimates, the Gross Domestic Product of the United States expanded by 2.4% in the third quarter. Despite the ultra-hawkish monetary policies of the Federal Reserve (Fed) and the previously disclosed 0.6% fall in growth, forecasts indicate a positive growth rate.

 

In addition, US Durable Goods Orders data will continue to be a key point. Compared to a reduction of 0.2%, it is projected that economic statistics will increase by 0.6%. Notable is the increase in core inflation, which includes oil and food prices. In spite of this, the predicted increase in demand for durable goods in the United States demonstrates healthy household demand.

 

Investors in Tokyo are anticipating the Bank of Japan's (BOJ) interest rate decision on Friday. In view of the shocks to foreign demand, BOJ Governor Haruhiko Kuroda will continue an ultra-loose monetary policy to stimulate the outlook for economic development. In addition, Japanese policymakers are anxious that the inflation rate could go below 2%; hence, an extremely liberal policy is the best alternative.

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