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Forex pairs in this Article » USD/JPY
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that the JPY is weak and the BoJ surprised markets.

Key Quotes

" During Monday’s session Japan released disappointing Q4 GDP results, with the economy expanding at just 1.0%q/q ann and 0.3% q/q (versus consensus estimates of +2.8%q/q ann and 0.7%q/q) and the weakness fairly broad based; in addition the GDP deflator came in at a notably soft –0.4%y/y. In response the BoJ surprised markets by doubling two fund provisioning measure, the first attempts to stimulate bank lending by providing 4-year loans at 0.1% to financial institutions; and the second is a growth supporting facility, where banks can also borrow at 0.1% for 4-years".

"However to be clear the BoJ has not increased or changed its core QQE, where its goal is to expand the monetary base by ¥60 to ¥70trn per year. We expect that eventually the BoJ turns to more aggressive policy and this supports a shift higher in USD/JPY. We hold a year-end target of 109."
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