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market analysis
Bank of Japan’s first resolution of the new year, belated US PCE data
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market Analysis]: The Bank of Japan's first resolution of the new year and the belated US PCE data". Hope this helps you! The original content is as follows:
XM Foreign Exchange Market Preview: The Bank of Japan's first resolution of the new year, belated US PCE data
Friday - the first interest rate decision of the Bank of Japan in 2026:
Among the developed countries, Japan is the first to make an interest rate resolution in 2026.

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On January 22nd and 23rd, the Bank of Japan will make its first interest rate decision in 2026. The results will be announced during the Asian market this Friday, with a high probability between 11:00 and 13:00. Different from the Federal Reserve's announcement of interest rate decisions at a "fixed time and fixed point", the Bank of Japan's decision results are only announced in "morning" or "afternoon", which is more flexible and free.
The agency believes that the Bank of Japan will remain on hold and will not adopt an interest rate hike policy. We hold the same view: no interest rate hikes. If the Bank of Japan raises interest rates, the Japanese media can always get the news in advance and publicize it. There is only one week left before the announcement of the Bank of Japan’s resolution structure, and the Japanese media is still “silent”, which means that there is not much to watch in this resolution and the probability of raising interest rates is low.
On the day when the resolution results are announced, Japan’s key data, the annual core CPI rate in December, will be released in advance. The agency expected a value of 2.4%, far lower than the previous value of 3%. Inflation is the "anchor" of monetary policy. Once Japan's inflation falls out of control, the Bank of Japan will not have the courage to continue cutting interest rates. If institutional expectations are fulfilled, the probability of the Bank of Japan raising interest rates that day will be infinitely close to zero.
Thursday - US PCE price index in November:
US PCE data, the importance is much higher than the Bank of Japan’s interest rate decision. Why is PCE sorted after resolution? Because this PCE data is supplementary data for November, it is too lagging and its importance is greatly reduced.

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The annual core PCE rate in November, the agency forecast value was 2.8%, and there is no www.xmtraders.comparison with the previous value. Because the US government was shut down in October, basic data could not be collected, and the data for that month was blank. Looking back, the core PCE annual rate in September was 2.8%, and institutions expect it to be the same, which means that institutions believe that the price level in the United States will be stable from September to November, with little fluctuation.
December has passed, but the PCE data for December has not yet been released. For the Federal Reserve’s interest rate decision in January, the data in November is not important, but the data in December is the key. However, December PCE data will not be released until January 29, later than the Fed’s interest rate decision. In the context of this data dislocation, the impact of PCE data on the market will be significantly weakened.
The heavyweight data on the U.S. labor market - initial claims for unemployment benefits this week will also be released on Friday. The previous value was 198,000, and the expected value is 212,000. It is expected to be higher, which means that the number of people applying for unemployment benefits has increased.
November PCE data and the clear unemployment rate data for that week are released at the same time, which will have a www.xmtraders.combined impact on the market. It is expected that the minute-level trends of the U.S. index, gold and other related products will fluctuate violently at 21:30 that day.
Tuesday + Wednesday - British data:
The market does not pay much attention to British data, and we mentioned it less in the outlook. However, there will be continuous British economic data released on Tuesday and Wednesday this week, which is still worth watching.

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On Tuesday, the UK's ILO unemployment rate will be released in November. The agency expects 5%, slightly lower than the previous value of 5.1%, but the change is very mild. On Wednesday, the UK's December core CPI annual rate was announced, with agency expectations of 3.2%, the same as the previous value.
Taken together, the unemployment rate has not changed much and the inflation rate has remained unchanged. The two data jointly prove that the UK's macroeconomic performance is stable and the need for monetary policy adjustments is very low.
With stable macroeconomics and unchanged monetary policy expectations, it is difficult for the currency value of the pound to undergo significant endogenous changes. The exchange rate fluctuations of GBPUSD are more based on the influence of the US dollar index and the Federal Reserve.
XM risk warning, disclaimer, special statement: The market is risky, so investment needs to be cautious. The above content only represents the personal views of analysts and does not constitute any operational advice. Please do not rely on this report as your sole reference. At different times, divided intoAnalysts' opinions may change and content will be updated without prior notice.
The above content is all about "[XM Foreign Exchange Market Analysis]: Bank of Japan's first resolution of the new year, belated US PCE data". It was carefully www.xmtraders.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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