19 Dec 2014
Governor Kuroda signals optimism over inflation – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, notes that BoJ’s announcement was as expected, keeping the monetary stance unchanged at its meeting today, and comments on the strong optimistic stance of the Bank over its inflation target.
Key Quotes
“The BOJ, as widely expected, announced an unchanged monetary stance at its meeting today and Governor Kuroda is speaking as I write with comments that signal strong optimism over getting the inflation rate to target by the end of FY2015. He also stated a desire for the yen to move in a “stable manner” and should reflect economic fundamentals.”
“Kuroda was particularly upbeat over the impact of the sharp drop in oil prices stating that the drop would “greatly push up Japan’s economy” and that this in fact would push up inflation. So clearly, like the FOMC, the BOJ is looking beyond the initial downward impact on annual inflation and highlighting the net benefit to the economy further out.”
“Clearly, the corrective phase for the USD/JPY rate looks complete already and USD/JPY is higher again today in line with the strength of equity markets. All of Asia is performing well with the Topix up 2.4% following a similar gain in the US yesterday.”
“Confidence has been helped by the rouble trading a little more stably over the last couple of trading sessions although this could easily turn quickly again. Beyond that though it is hard to cite any clear catalyst for the upturn in investor sentiment which suggests to us that this equity market rally might not be on the strongest of footings.”
“While the rebound in USD/JPY has been impressive, we’d be cautious buying at these levels just ahead of the 120.00 level.”
Key Quotes
“The BOJ, as widely expected, announced an unchanged monetary stance at its meeting today and Governor Kuroda is speaking as I write with comments that signal strong optimism over getting the inflation rate to target by the end of FY2015. He also stated a desire for the yen to move in a “stable manner” and should reflect economic fundamentals.”
“Kuroda was particularly upbeat over the impact of the sharp drop in oil prices stating that the drop would “greatly push up Japan’s economy” and that this in fact would push up inflation. So clearly, like the FOMC, the BOJ is looking beyond the initial downward impact on annual inflation and highlighting the net benefit to the economy further out.”
“Clearly, the corrective phase for the USD/JPY rate looks complete already and USD/JPY is higher again today in line with the strength of equity markets. All of Asia is performing well with the Topix up 2.4% following a similar gain in the US yesterday.”
“Confidence has been helped by the rouble trading a little more stably over the last couple of trading sessions although this could easily turn quickly again. Beyond that though it is hard to cite any clear catalyst for the upturn in investor sentiment which suggests to us that this equity market rally might not be on the strongest of footings.”
“While the rebound in USD/JPY has been impressive, we’d be cautious buying at these levels just ahead of the 120.00 level.”