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Forex pairs in this Article » USD/JPY
FXStreet (Bali) - The BOJ is expected to leave policy unchanged today, notes Yujiro Goto, FX Strategist at Nomura.

Key Quotes

"Inflation momentum remains strong for now, partly thanks to a weaker JPY. December core CPI, which excludes fresh foods, rose 1.3% from a year ago. The BOJ left policy unchanged in January, while BOJ Governor Kuroda suggested inflation will stay around 1.25% in the next six months. Inflation of 1.3% in December shows momentum remains in line with the BOJ‟s assumption and the Bank is unlikely to decide on additional easing for the moment."

"Market expectations for an early BOJ easing are declining now and thus, the market impact of the no change decision will probably be limited. While a majority of Japanese researchers expected the BOJ to ease by end-April in January, only 38% of researchers now expect an easing by end-April, according to JCER."

"Consensus expectations remain at April, but views on the timing of a BOJ easing are now almost evenly divided between April and July. As expectations for an early easing decline, the negative impact of a no policy change on USDJPY should be smaller."

"Governor Kuroda is likely to reiterate that the economy can keep growing beyond the consumption tax hike in April, and the economy is on track to achieve 2% inflation during his press conference. His stance is unlikely to change from the January meeting and thus, his press conference is also unlikely to move the FX market next week."
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