The main point we should consider is that the Japanese yen turned to be quite strange throughout the trading session this day and has come to the end of trades at low positions in relation to the United States dollar and British pound but strong enough against the Euro, Australian and New-Zealand dollars. As for the inflation level in Japan we have to mention that it increased to 1.2 percent throughout the previous month.
Such situation can be partly explained by the growth of the oil and other goods prices occurred recently. However the inflation caused by such factors can contribute to the fall of the firms and consumer spending and thus bring the Central Bank of the country into quite unstable position. Therefore in the occurred situation the desired way out for the Bank of Japan is to normalize interest rates. However such factors as substantial downside risks and faltering consumption may turn to be the cause that will lead the Central Bank to keeping the interest rates at the same point or decrease them. Nevertheless we suppose that the possibility of 25 bp downside move of the interest rates is not very high. Therefore the rates are likely to remain unchanged for a rather long period of time.