FXStreet (Guatemala) – Eric Theoret, CFA, CMT FX Strategist at Scotiabank noted the release of stronger than expected industrial production data ahead of the BoJ.
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Key Quotes:
“The release had been a key risk for JPY following last week’s disappointment in trade, with market participants positioning themselves in anticipation of a dovish shift in tone at the BoJ.”
“JPY remains vulnerable to data ahead of the BoJ, with CPI scheduled for release at 7:30pm EST, ahead of the policy decision around 11:00pm EST.”
“We are biased to JPY weakness, expecting an extension of the time frame for achieving the inflation target to reinforce policy divergence between an accommodative BoJ and a normalizing Fed.”
“We note the potential for an increase in the pace of asset purchases (currently 80trn), however it is not our base case.”
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