In the New York market on the 6th, USD/JPY traded in a range of ¥157.92–¥158.22. In the Tokyo market, attention is expected to focus on questions from representatives concerning Prime Minister Takaichi's policy speech. The BOJ is due to hold its Monetary Policy Meeting on 29–30 October, and reports may emerge that it has judged underlying inflation to have reached around 2%.
In the New York market on the 6th, USD/JPY traded between ¥157.92 and ¥158.22. While lower US long-term yields and market reaction prompted buying of the yen and selling of the dollar, EUR/USD rose to $1.1277 against the backdrop of the French presidential election's fiscal proposals.
The focus of today's Tokyo market shifts to the questions and answers from representatives in the House of Representatives concerning the policy speech delivered by Prime Minister Takaichi (高市) on the 5th. The prime minister indicated a stance of flexibly responding to market developments while signalling distance from reflationary policy and referring to responsible proactive fiscal policy and a consumption-tax cut.
Economic and Fiscal Policy Minister Jonai (城内) said that the phase of reflationary policy in the Abenomics sense had ended, while former BOJ Deputy Governor Wakatabe (若田部) pointed to the end of reflationary policy in light of progress in overcoming deflation. This has brought the divergence between BOJ policy and the market reaction into focus.
Reports from market sources said that the BOJ was considering moving toward indicating at its 29–30 October meeting that underlying inflation had reached around 2%. If this achievement is confirmed, the phase of rising interest rates could accelerate, and attention is also focused on Governor Ueda's (植田) comments.
In this context, how to adjust the degree of monetary accommodation amid the Takaichi administration's efforts to restrain rate hikes and the market reaction is a key focus, and the market will continue to monitor future policy decisions and market developments.