Bank of Japan maintains rate, yen hits 150

The Japanese yen continues to lose ground against the US dollar. In the European session, USD/JPY is trading at 149.74, up 0.32% on the day. Earlier, the yen reached the symbolic 150 level for the first time in two weeks.

There were no surprises from the Bank of Japan, which maintained rates at 0.50%. The decision was widely expected and the yen has posted modest losses today. The Bank's rate statement noted that "inflation expectations have risen moderately ", an acknowledgement of upwards pressure on inflation.

Governor Kazuo Ueda said at his press conference that "wage and price conditions are on track, possibly stronger than expected". However, Ueda added that the US and global outlook were "uncertain" and the Bank would determine its rate path based on upcoming data.

The BoJ has stressed that it will continue to hike rates if it sees that inflation is kept sustainable by rising wages. The BoJ wanted to see strong wage gains at the recent wage negotiations and should be pleased that large employers are offering wage hikes of around 5%.

Governor Ueda also expressed concern about US trade policy, saying "it is hard to qualify the risk" of US tariffs on Japan economic and inflation outlook. The US hasn't slapped tariffs on Japan but the country relies heavily on its export sector and Japanese manufacturers reported a decrease in confidence in March.

The Federal Reserve meets later today and is virtually certain to maintain the benchmark rates at 4.25%-4.5%. The economic outlook has darkened recently, with the stock market selloff and an escalating trade war. The markets have priced in another hold at the May meeting at 83%, up from 56% in early March, according to CME FedWatch.