JPY: Yen supported by the reduced BOJ easing expectations – MUFG
|By FXStreet FXStreet (Delhi) – Derek Halpenny, European Head of GMR at MUFG, suggests that the speculation remains that the BOJ may coincide the fiscal stimulus signalled by the government with additional monetary easing, perhaps as early as Q1 2016 but the upward revision to Q3 real GDP and the machinery orders data released today suggest that the BOJ can persist with its current stance for now.
Key Quotes
“The bright spot in the revised GDP data yesterday was the upward revision to business spending. The initial report showed a 1.3% Q/Q drop in business spending but this was revised to a 0.6% gain.”
“The outlook for business spending was further improved by the core machinery orders increase of 10.7% gain in October, which followed a 7.5% gain in September. The market expected a drop.”
“But crucially, the data this week makes it a lot less likely that the BOJ will consider additional monetary easing in the near-term. We are of the view that the scale of current easing restricts the scope for additional easing in any case, but the signs of improvement in the corporate sector will raise hopes that not only will there be an improvement in business spending but also in wage …read more
Source:: FX Street