The US FOMC and Japan's BOJ meeting will be held one after another this week, putting USD/JPY and the US and Japanese equity markets in focus. Reports suggest that the direction of the yen and equities could diverge depending on updates to the statements and outlooks.
The US FOMC and the BOJ Monetary Policy Meeting are scheduled to take place consecutively this week, with updates to the US interest-rate outlook and a reassessment of the outlook in Japan expected to be the market's main themes. Particular attention will be paid to the FOMC's updated dot plot and the press conference by Fed Chair Warsh, which could signal a turning point for additional rate hikes this year.
The BOJ meeting is scheduled to conclude on the 18th, with the statement and press conference by Governor Ueda (植田) the focus of market attention. The feasibility of achieving the price stability target and expectations for additional rate hikes are being discussed as factors that could affect the yen, according to reports.
A sharp decline in USD/JPY and a search for lower levels over the medium to long term have been highlighted, with volatility expected to rise following the US and Japanese monetary policy events. The impact on the S&P 500 and Nikkei 225 is expected to emerge indirectly through the correlation between foreign exchange and equities.
There is a view that weakness on rallies in US equities and a complex adjustment phase in the Nikkei 225 could coexist. Reports suggest that a stance emphasizing capital preservation and risk management has been proposed while assessing the initial market reaction after the events.