The CHF/JPY currency pair was mostly stable on Tuesday ahead of the outcome of the Swiss National Bank’s policy meeting and after the BoJ’s verdict.
The Swiss National Bank is expected to keep its policy rate without change at 0% at its June 18th meeting.
Low inflation has given policy makers room to stay cautious. Annual consumer price inflation in Switzerland held at 0.6% in May. While this print matched the prior reading and represented the highest level since late 2024, it fell short of the 0.8% consensus estimate, prompting market participants to reassess the likelihood of a near-term SNB rate hike.
The SNB’s latest projections point to average inflation of 0.5% in 2026 and 2027, and of 0.6% in 2028. This suggests that policy makers see little need for tighter policy.
The SNB has also reaffirmed its readiness to intervene in the Forex market if needed.
Meanwhile, the Bank of Japan concluded its two-day monetary policy review by increasing its short-term interest rate by 25 basis points to 1.0% from 0.75%. This adjustment took the benchmark rate to its highest point since 1995. The rate decision was made by a 7-1 vote.
According to the Monetary Policy Statement, BoJ board members intend to continue raising the policy rate in line with changes in economic activity, inflation dynamics, and financial conditions.
BoJ Governor Kazuo Ueda, who is in the hospital for medical treatment, did not attend the meeting and did not participate in the vote.
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