BoJ: Moving closer to further policy easing – MUFG
By FXStreet FXStreet (Delhi) – Leong Sook Mei, ASEAN Head of GMR at MUFG, note that there are expectations building up ahead of next week’s BoJ’s governor Kuroda’s speech that he may signal further policy easing which is likely to weigh on the Japanese currency.
Key Quotes
“More risk-averse trading conditions are helping to support a stronger yen as speculative short positions have been cut back sharply. It is outweighing for now the potential positive impact for USD/JPY from higher US yields.”
“Japan’s current account balance has also improved materially offering more support for the yen. The BoJ are likely to acknowledge that downside risks to external demand have increased at next week’s policy meeting although are unlikely to ease policy further.”
“Over the last week expectations have been building that the BoJ could ease policy further in autumn in response to the deteriorating outlook for growth and inflation which is helping to dampen scope for the yen to strengthen further in the near-term.”
“As a result market participants will be watching closely comments at next week’s press conference from Governor Kuroda for any potential signal that the BoJ is moving closer to easing policy further before year end which could weigh on the yen.”
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Source:: FX Street
