FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, suggests that the focus will now turn to the BoJ’s upcoming policy meeting to see if it will become the latest central bank to ease monetary policy further.
Key Quotes
“The recent easing of policy by the ECB and the PBoC has heightened expectations that the BoJ could provide a dovish surprise for the second consecutive year by easing policy further this week which has been weighing on the yen alongside the improvement in global investor risk sentiment.”
“Bloomberg has reported that BoJ officials see it as crucial to watch the release of production data ahead of this week’s policy meeting according to people with knowledge of the discussions at the BoJ. Given the volatile nature of monthly industrial production data it would be extraordinary for it prove decisive in setting policy but perhaps highlights at least that the decision is a close call.”
“Our analysts in Tokyo remain of the view that further easing will not be delivered as early as this week. The BoJ has provided no clear signal that further easing is imminent. An unexpected decision to ease policy would likely reinforce the US dollar upward momentum in the near-term.”
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