The Japanese yen remains steady in range in Asian session after the BoJ kept monetary policies unchanged. The central bank maintained the pledge to expand monetary base at an annual pace of JPY 60-70T on unanimous vote. Interest rate is held near zero. Regarding the economy, the BoJ maintained their outlook and reiterated that "Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike." On the optimistic side, it upgraded view on business fixed investment as the pick-up got "increasingly evident". Also, industrial production grew "at a somewhat accelerated pace". However, on the downside, the BoJ noted that exports "have recently leveled off more or less", a downgrade from prior assessments of "exports have generally been picking up". Kiuchi proposed that BoJ should only maintain the high degree of easing within two year from April 2013 to prevent it from being overdone, but was voted down.
Yesterday, Chicago Fed Evans said that once unemployment rate drops to the 6.5% threshold as noted in the forward guidance, the Fed will come up with a "different language formulation that doesn't mention 6.5%". Evans expected Fed to adopt a "qualitative description" as the forward guidance is revised. And, he expected interest will stay near zero "well past the time we change the language". Regarding the economy, He expected US growth to be at 2.5-3.0% this year, unemployment rate to fall below 6.5% and inflation to climb back to 1.5%.
The ECB executive board member Lautenschläger the central bank has "room left to act" and "the deposit rate could be negative". Nonetheless, she noted that ECB is "receiving some positive signals from incoming data" and "there was no strong reason to act" yet. She also reiterated the central bank's stance that "interest rates will remain at the present level, or even lower, over a longer period of time and well into the recovery."
Sterling is the weakest currency this week as hit by comments from BoE deputy governor Bean. He noted that further appreciation of the pound would not help facilitate rebalancing towards net exports. And, he warned not to get "too hung up" about the precise date of the first rate hike from BoE. Markets are pricing the first hike in spring of 2015. But Bean stressed that "we are likely to learn a lot between now and then about the pace of the recovery, the amount of slack and the evolution of supply, and the impact on costs and prices."
On the data front, UK BRC sales monitor dropped -1.0% yoy in February. Australia NAB business confidence dropped to 7 in February. UK production data will be the main focus today. US will release wholesale inventories.