On Friday (April 26th), the Bank of Japan announced its first monetary policy decision since withdrawing from negative interest rates in March.

The main points of a monetary policy statement are:

• The Bank of Japan will support unsecured overnight lending rates between 0% and 0.1%.
• The Bank of Japan will continue to make bond purchases based on its decision in March 2024.

The main points of the Bank of Japan outlook report are:

• The economy may continue to grow at a rate higher than the potential growth rate.
• Compared to the same period last year, the Bank of Japan expects the annual inflation rate to be in the range of 2.5-3.0% in 2024, and 2% in 2025 and 2026.
• Due to weak private consumption, the Bank of Japan's growth forecast for 2023 and 2024 is lower than the previous outlook report.
• However, the core inflation forecast for 2024 is relatively high.
• Risks faced by the outlook include uncertainty in economic activity and prices.
• Several factors could exacerbate uncertainty, including domestic wage and price-setting trends.

Prior to the release of the Bank of Japan's monetary policy decision and outlook report, the USD/JPY fell to a low of 155.510 and then rose to a high of 155.659.

Subsequently, influenced by the monetary policy decision and outlook report of the Bank of Japan, the USD/JPY fell to a low of 155.408 and then soared to 156.136.

On Friday, April 26th, USD/JPY rose 0.31% to 156.135.

Next, investors will focus on the Bank of Japan's press conference. The views on the Japanese yen, inflation, economic outlook, and interest rate hike schedule need to be given attention by investors.

Recently, the Bank of Japan has issued a mixed signal regarding interest rate trends. Bank of Japan warns not to expect multiple interest rate hikes. However, the Bank of Japan also stated that the continued acceleration of inflation towards the 2% target may trigger a response from the Bank of Japan.

In subsequent meetings, the US economic agenda will become the focus. The US personal income and expenditure report will attract the attention of investors.

Economists predict that personal income and expenditure increased by 0.5% and 0.6% respectively in March. In February, personal income and expenses increased by 0.3% and 0.8% respectively.

In addition, economists expect the core personal consumption expenditure price index to rise by 2.6% year-on-year in March. The core personal consumption expenditure price index increased by 2.8% year-on-year in February.

If personal income and expenditure reports exceed expectations, it may suppress bets on multiple interest rate cuts by the Federal Reserve in 2024.