BOJ to Leave Rates Untouched, Eyes on Kuroda and Local Data
As expected, BOJ decided to leave Interest Rates at current -0.1%, and Japanese Government Bonds (JGP) Yield Target around 0%. The central bank, however, upgraded the Japanese economic outlook in its quarterly outlook report.
On quarterly Economic Outlook:
BOJ increases economic assessment
Japan possibly to see Inflation reach 2% around fiscal 2018
Moves in fx, commodities markets pose both upside, downside risks to prices
Chances for firms to become more cautious on prices and wages
Some uncertainty over how far inflation expectations will rise given slightly weak consumer prices
Japan's economy turning towards moderate expansion
Economy, price risks tilted towards downside
Output, exports on upward trend
Japan economy to continue moderate expansion
Momentum towards hitting 2%target lacking
Long-term inflation expectations remain on weak note
Uncertainties about overseas economies could pose some downside risks for japan economy
Japanese real GDP expectation in fiscal 2017/2018 at +1.6% compared to 1.5% on Jan, and Core CPI expectations in fiscal 2017/2016 at 1.4% compared to 1.4% during Jan.
Regarding USD/JPY, the pair clocked 111.78 high yesterday over optimism aroused by Trump's eagerly-tax-plan, but as details were laid out, markets did not digest the specifications voicing frustration that the tax plan will lead to trade deficit. As a result, the pair retreated 111.04 closing price. Gov. Kuroda will cross wires at 6:30 AM GMT today, with expectation to elaborate further on Japanese Economic Outlook. USD/JPY currently trading 111.22 intraday with 39-pips price action, 28-pips above 200 EMA D1, and 5-pips below 50 EMA D1.
The pair awaits economic data both from U.S and Japan as below:
1- JPY - BOJ's Gov. Kuroda speech today at 6:30 AM GMT.
2- USD - Unemployment Claims and Core Durable Goods Orders m/m both today at 12:30 PM GMT.
3- JPY- House Hold spending + National and Tokyo Core CPI + Unemployment Rate today at 11:30 PM GMT.
4- JPY Prelim Industrial Production m/m + Retail Sales y/y today at 11:40 PM.
Technical:
Trend: Bearish Sideways
Resistance levels: R1 111.62, R2 112.56, R3 113.77
Support levels: S1 110.26, S2 109.17, S3 108.14
Comment: Look forward for economic data both from U.S and Japan which will giver a better outlook for USD/JPY trend the coming days. Political tension in the Korean sea to be watched closely as Japanese Yen tend to be a sacred haven substitute. Keep an eye on U.S Index levels.