In the Tokyo market, attention is focused on the content of the BOJ's monetary policy meeting and BOJ Governor Ueda Kazuo's (植田 和男) press conference. The outlook for a rate hike at the meeting, the presentation of a terminal rate and GPIF's investment policy could influence market movements ahead.
In the New York market on the 17th, USD/JPY fell to ¥155.34 before rebounding to around ¥156.10 as long-term US Treasury yields declined, while EUR/USD rose to $1.1498. Against this backdrop, developments in USD/JPY will be closely watched in the Japanese market.
In today's Tokyo market, the BOJ's monetary policy meeting is pricing in a 0.25-percentage-point policy rate hike, with the number of members supporting the 0.50-percentage-point hike advocated by hawkish BOJ Policy Board member Takata Hajime (高田 創) among the key points of focus. The estimated neutral rate range is 1.10%-2.50%, and the conclusion on the terminal rate could shift market views.
The two-year-forward one-year rate in the overnight index swap (OIS) market, which is watched as a market proxy, is approaching the 2.0% range and is expected to be nearing the 2.50% upper end of the terminal rate range. At the FOMC, the federal funds rate was raised to 3.75%-4.00%, with an additional hike to 4.00%-4.25% indicated by year-end, while rates were expected to remain unchanged in 2027.
The Government Pension Investment Fund (GPIF) will hold an investment committee meeting on 21 August to consider revising its basic portfolio. This comes shortly after the Minister of Finance called for expanded domestic investment in July and is being watched as a potential yen-positive factor. In the past, there have been instances in which dollar buying and yen selling accelerated in tandem with additional BOJ easing.