Bob Elliott
· Nonconsensus
· April 27, 2026 at 10:00
· ⏱ 5 min read
| Read on Substack ↗
Summary
The author argues that despite market expectations for a hawkish Bank of Japan, underlying economic weakness and an impending energy shock make it more likely the BoJ will remain dovish. This inaction would probably lead to further weakness in the Japanese yen.
•Markets are anticipating a hawkish turn from the Bank of Japan (BoJ).
•However, Japan's economy is already showing signs of weakness and is facing an energy shock.
•The author believes the most probable outcome is that BoJ Governor Ueda will do nothing.
•In this scenario, the Japanese yen would likely continue to weaken to absorb the economic pain.