Yen surges after markets are disappointed by BoJ's announcement. The key interest rate was held unchanged at -0.1% while there were speculations that it could be pushed further negative to -0.3%. Meanwhile, BOJ did announced addition easing measures to boost the economy. The central bank will by JPY 6T of ETFs, up from JPY 3.3T. But the total size of asset purchase will stay at JPY 80T a year. The expansion of ETF purchase was approved by 7-2 vote. Nikkei responses by falling sharply and is losing -300 pts at the time of writing. Elsewhere in currency markets, some strengthen is seen in Aussie in spite of risk aversion. That could be due to speculation that RBA would follow BoJ and stand pat next week.
Also released from Japan, national CPI core dropped -0.5% yoy in June, worse than expectation of -0.4% yoy. Tokyo CPI dropped -0.4% yoy in July, inline with consensus. Unemployment rate dropped to 3.1% in June, below expectation of 3.2%. That's also the lowest level in 21 years. Household spending dropped -2.2% yoy versus expectation of -0.4% yoy. Industrial production rose 1.9% mom versus expectation of 0.6% mom. Retail sales dropped -1.4% versus expectation of -1.2% yoy. Also released in Asian session, New Zealand building permits rose 16.3% mom in June and NBNZ business confidence dropped to 16 in July. Australia PPI rose 0.1% qoq in Q2.
Looking ahead, Eurozone GDP and CPI will be the main focus in European session. Eurozone will also release unemployment rate, Swiss will release KOF leading indicator and UK will release mortgage approvals. US Q2 GDP is the major focus in US session. US will also release employment cost index and Chicago PMI. Canada will release GDP, IPPI and RMPI.