Forex: USD/JPY: BoJ Keeps Its Expanded Monetary Policy Unchanged

on Jun 14, 2013
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Released today at 00:50 BST today were the minutes of the Bank of Japan’s most recent monetary policy meeting. The BoJ is maintaining unchanged its expanded monetary policy and signalled its intention of achieving its inflation goal in two years. The central bank’s policy board noted that the Japanese economy had finally started to become upwardly mobile and admitted that the bank’s new inflation target of two percent may prove a difficult ask.

Policy board member Takahide Kiuchi said that, given that difficulty, the bank should limit quantitative easing to avoid financial imbalances.
In their release of the minutes, the board collectively observed: “Japan’s economy has started picking up. Exports have stopped decreasing as overseas economies have been moving out of the deceleration phase that had continued since last year and are gradually heading toward a pick-up. Business fixed investment continues to show resilience in nonmanufacturing and appears to have stopped weakening on the whole. Public investment has continued to increase, and housing investment has generally been picking up.”

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Minutes after trading opened yesterday, Japanese Foreign Bond Investment data was released, showing a fall to ¥3.869 billion in the week ended June 7 from ¥1.172 billion in the prior week. And Foreign Investment in Japanese Stocks for the same period improved to ¥1.136 billion, against the ¥1.911 billion outflow the previous week.
The USD/JPY started today’s Asian session at 95.54 but fell to 94.94, the session low, following release of the BoJ minutes. Currently the pair is trading around 94.95 and looking slightly bearish.
Mid-way through yesterday’s European session, the pair fell further, to a two-month low at 93.77.

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