This morning: The decision on the monetary policy of the Bank of Japan!
Dear traders,
Tomorrow, from 6:30 to 8:30 (Kiev), there will be a news block on Japan!
According to analysts’ forecasts, as a result of its two-day meeting on Tuesday, the Bank of Japan will also maintain the current monetary policy, including the interest rate at the level of -0.1%. At the same time, in its statement, the Bank of Japan will point to a slight improvement in the economic situation in the country. After the announcement of the decision on the interest rate, the Governor of Japan Haruhiko Kuroda will hold a press conference.
In recent years, there have been several signals indicating that the central bank of Japan is preparing the ground before curtailing its quantitative easing program. Earlier this month, the Bank of Japan slightly reduced the volume of redemption of Japan’s long-term government bonds (JGB), backed up by rumors that it could follow the example of the Fed and the ECB, beginning a reduction in the financial incentive program earlier than experts predicted.
Leading analyst of the company Ester Andrew Green writes:
” What can be more delicious for our carnivorous perception of trade than another opportunity to see the increased volatility of the market during a press conference and meetings of national banks? The answer is NOTHING !!! This is a dessert. These 100-point candles, like candles on a cake at the birthday party. And I think that we will have such an opportunity to enjoy this holiday this week.
What do we expect from the Bank of Japan this week:
- it will continue to reduce the volume of purchases of government debt, thereby confirming further plans to return to normal monetary regimes;
- it will announce plans to further raise the rate on state funds by 10 bp., with benchmarks for the second half of the year.
We can say that there are very positive expectations, but it should be noted that the strengthening of the Japanese currency to levels below 110.00 continues to be under the special control of the Bank of Japan and fraught with its indirect intervention. Therefore, in my opinion, the corridor, which was formed throughout the past year in the range 108.00-115.00, will remain valid for a while.
Look at Figure 1. … (link to the whole article with specific recommendations) “
This week, on Wednesday, there will be data on Japan’s exports for December. According to analysts’ forecasts, this figure will grow for the thirteenth consecutive month, thanks to the demand of foreign companies for steel and cars, as well as equipment for the production of semiconductors.
On Thursday, an inflation report will be published in Japan, which is projected to show the twelfth month of rising inflation in a row. However, inflation will remain well below the Japanese bank’s target of 2%.
Have a nice evening and a volatile market!
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