Forex Flash: USD/JPY look neutral ahead – BTMU
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USD/JPY
FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts are neutral on USDJPY and see spot being held between 87-89.
They note that the first meetings of the economic revitalization and the economic & fiscal policy council (EFPC) were held this week to reveal the reality of fiscal policy in 'Abenomics'. Simultaneously, the EFPC showed its demanding stance to BoJ Governor Shirakawa.
They add that the emergency economic plan inclusive of FY2012 stimulus package was traditional and contained no surprises. The strong yen weakening trend remains in place although selling momentum has paused at least momentarily over the past week and the cabinet is expected to approve the stimulus package next week with the details of the fiscal package and fiscal policy also to be clarified.
Looking ahead they write, "Building investor expectations for additional BoJ monetary easing continue to push the yen lower ahead of its next policy meeting on the 21st to 22nd January. The BoJ is expected to set a 2.0% inflation goal, although uncertainty still surrounds the timing of when the goal will have to be achieved. The wording of the goal will prove crucial for the credibility of BoJ monetary policy with sustained 2.0% inflation a distant dream at present."
They note that the first meetings of the economic revitalization and the economic & fiscal policy council (EFPC) were held this week to reveal the reality of fiscal policy in 'Abenomics'. Simultaneously, the EFPC showed its demanding stance to BoJ Governor Shirakawa.
They add that the emergency economic plan inclusive of FY2012 stimulus package was traditional and contained no surprises. The strong yen weakening trend remains in place although selling momentum has paused at least momentarily over the past week and the cabinet is expected to approve the stimulus package next week with the details of the fiscal package and fiscal policy also to be clarified.
Looking ahead they write, "Building investor expectations for additional BoJ monetary easing continue to push the yen lower ahead of its next policy meeting on the 21st to 22nd January. The BoJ is expected to set a 2.0% inflation goal, although uncertainty still surrounds the timing of when the goal will have to be achieved. The wording of the goal will prove crucial for the credibility of BoJ monetary policy with sustained 2.0% inflation a distant dream at present."
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