forex-comparic-photo-177-of-564-300x198In the night our time the Bank of Japan concluded a two-day monetary policy meeting. As we predicted yesterday, BoJ decided not to make changes in the polmon, but upgraded assessment of the economic situation – which is the first of its kind step for at least several months. Details inside macro morning commentary.

What we learned from BoJ meeting?

There are no surprises – short-term target for the interest rate is still -0.1%, target yield of 10-year JGB is about 0% and the purchase of government bonds still on the annual level of 80 trillion yen. Markets expected hawkish changes in the business ratings and those actually were made. Full text of the statement download here.

  • Changing forecasts regarding exports
  • Japanese economy is likely to enter into a period of moderate expansion
  • The Japanese market still gradually developing
  • Threat to the forecasts may be changes in the US economy and the impact of the US polmon on global markets

The event generally weakened the Japanese yen, which immediately after the publication of data began to drop. About 7:30 began press conference of Haruhiko Kuroda:

  • A weak yen increases the prices pushes up the cost of imports
  • Currently the Japanese economy is growing above its potential
  • Updating economic evaluations based on a clearer improving economic conditions abroad
  • Monetary policy is not focused on the foreign exchange market
  • Currently on FX we see strong dollar not a weak yen
  • Divergence of policy of Fed and BoJ may affect the currency markets
  • The current levels of yen are not surprising – similar to those from Feb.
  • Kuroda does not believe that the yen weakened too much
  • Control of the yield curve is operating properly
  • The target level of profitability of JGBP is not rigid but liquid value

In connection with the meeting of the Bank of Japan, USD/JPY strengthens practically from the start of the Tuesday session earlier testing 117.00 and 78.6% abolition. Now price reaches next resistance at 118.00. After defeating it we can think about further appreciation:


What we are waiting for ?

In addition to the night’s entertainment provided by RBA and BoJ already at 08:00 appeared the results of the PPI in Germany m/on/m in November. Although the growth slowed down compared to October, it still was slowing slower than predicted markets. In the following session hours we will have only information about wholesale in Canada and later in the evening trade balance of New Zealand:


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