27 Apr 2016
FOMC will not play much on BoJ - BBH
Analysts at Brown Brothers Harriman explained that they do not think that the outcome of the FOMC meeting plays much of a factor in the BOJ's decision.
Key Quotes:
"They know what many in the market understand. A rate hike by the Fed is highly unlikely, and move in June is possible but far from a done deal."
The price action should be respected.
The JPY112.00 area is the proximate cap. A move above there could see JPY114.00. On the downside, we see initial support in the JPY110.25 area, and then the pre-weekend low near JPY109.40.
A break of this lower level would warn of the risk of a return to the lows (~JPY107.70).
There are equity implications as well. If the BOJ does not increase the ETF purchases, or in other ways disappoint expectations, the first target for the Nikkei (closed at 17290 today) would be the high from April 20 (bottom of a gap) at 17099, but a move that corrects the advance from April 18 (~16254) could bring the Nikkei toward 16773."
Key Quotes:
"They know what many in the market understand. A rate hike by the Fed is highly unlikely, and move in June is possible but far from a done deal."
The price action should be respected.
The JPY112.00 area is the proximate cap. A move above there could see JPY114.00. On the downside, we see initial support in the JPY110.25 area, and then the pre-weekend low near JPY109.40.
A break of this lower level would warn of the risk of a return to the lows (~JPY107.70).
There are equity implications as well. If the BOJ does not increase the ETF purchases, or in other ways disappoint expectations, the first target for the Nikkei (closed at 17290 today) would be the high from April 20 (bottom of a gap) at 17099, but a move that corrects the advance from April 18 (~16254) could bring the Nikkei toward 16773."